Segro creates big box partnership with Roxhill

Segro has created a partnership with Roxhill Development Group that will give the FTSE 250 real estate investment trust access to a portfolio of big box logistics warehouse development sites in the South East and Midlands.

The sites subject to the transaction are at various stages of the planning process and the terms of the deal allow Segro to phase its investment.

Roxhill will act as development manager to the new partnership and work exclusively with Segro once it has completed a number of existing development projects with other partners.

If all the sites become fully developed, the total potential capital expenditure including land and infrastructure, is estimated to be around £800m over a 10-year period which will deliver over 10m sq ft of big box logistics warehousing.

Segro said the developments should generate an estimated blended yield on cost of approximately 7% at current rental levels.

Chief executive officer David Sleath said: "This partnership establishes a clear path for us to achieve the scale we desire in the attractive UK big box logistics market.

We are convinced that this market has very favourable long term prospects given the lack of quality supply and increasing demand from retailers and logistics operators for modern space in the right locations."

At 0822 GMT, Segro shares were up 1.1% to 434.84p.