Segro Buys BAA's 50% Interest In APP For GBP111.3M

Segro PLC (SGRO.LN), a provider of flexible business space, said Tuesday it has exchanged conditional contracts for the acquisition of BAA Ltd.'s 50% interest in the Airport Property Partnership, or APP, for GBP111.3 million cash.

MAIN FACTS:

-Segro will assume BAA's share of APP's debt and other liabilities of approximately GBP128 million.

-APP is a 50/50 joint venture with Aviva Investors, focused on airport-related industrial assets in and around major U.K. airports.

-BAA is owned by Grupo Ferrovial S.A. (FER.MC)

-APP portfolio includes 17 direct property assets and three indirect investments.

-The direct assets comprise an area of 3.5 million square feet with a vacancy rate of 6.8% by ERV and an average unexpired lease length of 13.4 years.

-By value, 73% of the assets are located in the Heathrow market.

-The acquisition price implies a property valuation of GBP446.6 million on a 100% ownership basis and a net equivalent yield of 7.6%.

-Segro will become the asset manager of the APP portfolio whilst Aviva Investors will retain its role as fund manager.

-In addition, Segro and Aviva Investors are in discussions to expand the joint venture significantly through the proposed purchase by APP of approximately GBP240 million of complementary assets within Segro's existing portfolio.

-In aggregate the two transactions are expected to generate net cash proceeds of approximately GBP60 million for Segro.

-Shares closed Tuesday at 318.9 pence.

-By Tommy Stubbington, Dow Jones Newswires; 44-20-7842-9268; [e-mail]