LONDON (ShareCast) - (ShareCast News) - Property investment trust Segro has transferred a portfolio of continental European big box warehouses and development land to its 50%-owned joint venture in exchange for €89.4m (£71m).
The transaction is part of the FTSE 250 company's strategy of holding continental big box warehouses and development land primarily within its logistics-focused SEGRO European Logistics Partnership (SELP) vehicle, which is half owned by Canada's Public Sector Pension Investment Board.

Segro, which acts as asset, property and development manager of the JV, created the JV with PSP Investments in 2013 to use the third party capital to accelerate growth of its continental European logistics portfolio and leverage its capital and management platform across a wider asset base.

The properties transferred on Wednesday included four fully-let, modern warehouses containing 133,000 square metres of space, three of which are located in Italy and were acquired as part of a deal in 2015.

The fourth asset is located within the Segro Logistics Park in Prague and it let to a pharmaceutical client.

The weighted average lease length of the tenancies across is 11 years, with the sale price of the built assets €81.2m and a topped-up initial yield of 6.3%, a net initial yield of 2.3% according to book values at 31 December.

The portfolio also contains 18.1 hectares of land capable of supporting approximately 66,000 sq m of big box warehouse development in Prague and Tychy, Poland.

In addition, Segro has also exchanged contracts with SELP to sell a 4.7 hectare development site near Schiphol Airport, in Amsterdam, with completion expected early in the second half of 2016.

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