Commercial Property News

Segro has announced the sale of its 50% stake in its shopping centre JV with Tesco to British Land for £26.9million, the consideration based on a gross asset value of approximately £174million. This is the fifth joint venture British Land has with Tesco.

Segro and Tesco created the joint venture twenty years ago in 1989. This deal relates to Segro's holdings in the two shopping centres located at Surrey Quays in Rotherhithe and Clifton Moor in York. Both retail centres are anchored by Tesco superstores. The property value and annual passing rents attributable to the 50% interest are £87 million and £5.65 million respectively, of which rents from the Tesco stores represent 52%.

This sale completes Segro's exit from its interests in retail property. Since 2004 it has been actively divesting its retail property holdings to focus on flexible business space. In June 2008 it completed the sale of one of its major retail estates, the Bath Road Retail Park, Slough to the Crown Estate.

DTZ advised Segro on this transaction.

Ian Sutcliffe, Segro's UK Managing Director said: 'We are pleased to have completed the sale of our 50% stake in these two shopping centres to British Land. These shopping centres were developed a number of years ago and do not represent the current focus of our business. Segro is the largest industrial REIT in Europe and our business focus is very much on flexible business space as was highlighted by our acquisition of Brixton earlier this year.'

Chris Grigg, Chief Executive, British Land, said: "We are delighted to enter into a further Joint Venture with Tesco. These retail locations offer attractive opportunities for our asset management expertise to add value over the short and medium term."