M&G Real Estate and SEGRO plc today announce they are to dissolve their Heathrow Big Box (HBB) 50-50 joint venture, ahead of its termination date in June 2016. Under the terms of the agreement, M&G Real Estate takes full ownership of Heathrow Corporate Park at a value of £118.7 million and will also purchase HCH House in Poyle directly from SEGRO for £15 million.
HBB was formed as a joint venture between Brixton PLC and M&G Real Estate in 2004 to own two assets in the vicinity of Heathrow Airport: Axis Park and Heathrow Corporate Park. SEGRO acquired the interest following its take-over of Brixton PLC in 2009.
Heathrow Corporate Park is a modern big box estate consisting of approximately 541,000 sq ft of warehouse space across 13 units. Situated approximately two miles from Heathrow Airport, the asset is fully let to tenants including British Airways Plc, Sunguard Availability Services (UK) and Morgan Stanley UK Group. HCH House spans 61,000 sq ft and is let to Heathrow Cargo Handling until November 2031 with a tenant break in 2021.
Andrew Windle, Associate Director, M&G Real Estate, comments: “This is a satisfactory conclusion to a successful joint venture with SEGRO. The assets we are acquiring provide us with very good exposure to the Heathrow market, where there is limited supply, which should provide strong rental growth and returns for our investors.”
