Segro buys London warehouse site for £202.5m

Segro has bought a 34-acre warehouse site in West London for £202.5m from Federated Hermes.

The property investor and developer said the Perivale Park estate was in its core west London cluster by the A4 main road into central London and within two miles of the North Circular, making it "perfectly located" for distribution into London. It has 55,100 sq m of lettable space over 23 units and eight acres of land with development potential.

Perivale Park is fully let with a weighted average unexpired lease term of 3.4 years to break and 5.5 years to expiry. It generates a topped-up passing rent of £6.8 million based on an average in-place rent of about £10 per square foot with an estimated rental value of £12.50 per square foot (excluding the rent for the land).

The FTSE 100 company said this rent was low compared with market rents of about £15 to £20 per square foot at Segro's nearby estates in Park Royal and Greenford. Reflecting these low rents, the topped-up net initial yield is 3.5% and the equivalent yield is 4.3%.

Alan Holland, Segro's Greater London business unit director, said: "Perivale Park is a perfect fit for Segro, sitting adjacent to the A40 and nestled between our core holdings in Greenford and Park Royal.

"It offers a rare opportunity to build further scale and drive value in an area where we already have considerable expertise and knowledge of the local market and customer base. It also offers medium-term development and redevelopment potential in one of London's prime, and most supply-constrained, industrial clusters."