SEGRO Prepares a Joint Venture for Three UK Logistic Parks Valued at £3 Billion Eventually
On Wednesday, SEGRO confirmed the formation of a new joint venture in partnership with a major institutional investor to develop three large UK logistic parks. The deal involves the contribution of three existing assets valued at £1 billion and requires a development investment estimated at £820 million.
A 50/50 Structure Across Three Major Logistic Parks
SEGRO has reached a principle agreement for the creation of an equal-share joint venture aimed at developing and operating three major logistic parks in the UK, located in key distribution areas. At full occupancy, these three sites are expected to generate about 925,000 square meters of rental space and an anticipated annual rental income of £135 million, with a gross asset value estimated at £3 billion at the end of development.
The joint venture will be initiated by contributing the sites in Radlett, Coventry, and Northampton, currently comprising 225,000 square meters of leased space generating an annual rental income of £25 million, along with 380 acres of buildable land. These three assets will be transferred to the joint venture at a price of around £1 billion, in line with the reported book value and the planned investments.
An Investment Plan Extending Until 2030
The development funding, estimated at £820 million, will be executed through a combination of capital provided by the partner and non-recourse debt incurred at the joint venture level. SEGRO anticipates the delivery of the developments over a period extending to 2030. Concurrently, SEGRO will provide the joint venture with administration, asset management, real estate, financial, and advisory expertise services, and will receive management fees in return.
David Sleath, CEO of SEGRO, commented: 'This strategic partnership allows us to consolidate some of the most attractive logistic parks in the UK into an efficient capital structure, enhancing our investment capacity and highlighting the strength of our asset management platform.'
Finalization Expected in the Second Half of 2026
The parties have signed heads of terms related to the operation. Subject to final approvals, confirmatory due diligence, and the finalization of contractual documentation, the definitive transaction documents are expected in the second half of 2026. The release emphasizes that 'no certainty can be guaranteed regarding the definitive conclusion of a transaction.' Morgan Stanley, JLL, and Slaughter and May are advising SEGRO on this operation.
