ProLogis - the world's largest owner, manager and developer of distribution facilities - yesterday confirmed that it had acquired a large portfolio of real estate assets in the UK through the takeover of Severn Trent Property.
It has bought the unit from Birmingham-based water company Severn Trent for £71.7 million in cash.
Colin Matthews, Severn Trent's group chief executive, said: "The transaction is in line with our stated intention to focus on water."
The group added that the deal would give it a profit of around £35 million.
The portfolio includes sites that will support more than 3.5 million sq ft of industrial development in the East and West Midlands, the UK's primary area for distribution and logistics.
"We're extremely pleased to announce this transaction," said Alan Curtis, ProLogis managing director and head of the company's UK operations.
"Maintaining a long-term pipeline of developable land is a critical success factor in the UK industrial development business, given the general shortage of supply here and continued robust demand from customers for high-quality, well-located facilities.
"Through this transaction, we have added substantially to our land position in the country's most important sub-market." The Severn Trent portfolio includes development sites at three major industrial locations: n Midpoint Park, an 84-acre property near Birmingham adjacent to an existing industrial project. The parcel can support more than 1.2 million square feet of warehouse development. ProLogis acquired a 100 percent freehold interest in the site.
n Freight Terminal (DIRFT) is a 131-acre site in the Daventry International Rail East Midlands adjacent to an existing business park. The site, which includes an intermodal rail facility, can support more than 1.9 million sq ft of industrial development. ProLogis has acquired a 92.5 per cent freehold interest in the site; the remaining interest is held in a joint venture with a private developer. n Coton Park, a 26-acre parcel in the East Midlands adjacent to an existing ProLogis industrial project. The site can support approximately 365,000 sq ft of new development. ProLogis has acquired an option to purchase the property, which it expects to exercise in due course.
Most of the new development at the three sites will take place over the next three years, with a total expected investment of over £302.6 million.
"All three of these sites are prime distribution locations," Mr Curtis said. "Each offers excellent access to key
motorway junctions, and all have undergone extensive planning and entitlement work prior to closing. In short, they present a unique opportunity for ProLogis to enhance its UK industrial platform and further extend its leadership position in this market."
ProLogis has £13.3 billion of assets owned, managed and under development, comprising 406.9 million sq ft in 2,406 properties.