The property company bought Electra Park from Schroders
Warehousing landlord Segro has increased its presence in London by buying a site in Canning Town for £133 million.
The property company, which counts Amazon, Tesco and Ocado as customers, said it has bought Electra Park, a 13 acre estate, from global investment manager Schroders.
It revealed the purchase as it showed how high online retailer demand for warehouse space during the coronavirus crisis, boosted the business in the third quarter.
Segro said between July 1 and October 20 it signed contracts worth £15.8 million of new rent for the company.
David Sleath, chief executive of the FTSE 100 landlord, said: Our active, substantially de-risked, development programme comprises over 1 million sq m of new space under construction or in advanced discussions.
He added: Rental collection has improved this quarter and we remain confident in the outlook for our business despite the macroeconomic uncertainties caused, in part, by Covid-19. We expect to continue to drive sustainable growth in both earnings and dividends from the combination of new rental income from the development programme, compounded with the benefits from active asset management of our existing prime portfolio.
In recent years the company has seen a number of retailers want more storage and distribution space closer to cities, in response to customer demand for faster deliveries.
The latest acquisition in Canning Town comprises 21,200 sq m of lettable space across 10 properties, of which nine are let, and there is rental income of £3.4 million per year.
Alan Holland, business unit director for Segro’s Greater London portfolio, said the deal is an “opportunity for Segro to consolidate its leading London footprint and is a strong fit with its well established prime urban warehouse portfolio”.
Holland added that Electra Park is in an area that is currently undergoing significant redevelopment and modernisation. He said: This should further improve the already attractive supply/ demand dynamics and create the potential for strong rental growth, as we have seen happen in other inner London markets.
Property agent Gerald Eve advised the vendor and JLL represented Segro.
