Harbert buys £284m of real estate from Segro

The Birmingham, Alabama-based investment management firm has purchased a four-strong industrial property portfolio and an office park from the UK REIT on behalf of its latest opportunistic fund and in tandem with 'institutional investors'.

Harbert Management Corporation, the Birmingham, Alabama-based investment management firm, has added to its European real estate exposure with the purchase of £284 million (€355 million; $443.6 million) of property from UK logistics and business parks REIT Segro.

The investments were made on behalf of Harbert’s third Europe-focused opportunity fund, Harbert European Real Estate Fund III and in partnership with certain unnamed unstitutional investors.

The firm has acquired for £204.5 million four industrial estates comprising 4.35 million square feet at Trafford Park and Heywood Distribution Park in Manchester and Kings Norton Business Centre and Meteor Park in Birmingham. The deal for the industrial parks also included 62 acres of development land.

Harbert has also purchased the IQ Farnborough office park in Hampshire for £79.75 million. The 620,000 square foot park was previously owned by the UK government’s Ministry of Defence before Segro bought it in 1999.

Scott O’Donnell, senior managing director of Harbert Management Corporation Europe, said: “these acquisitions represent our second and third transactions with SEGRO and fit nicely with our existing portfolio.”
“Both acquisitions are defensive in nature with strong in place cash flow yet have significant upside potential. We are pleased that in today’s challenging economic environment that we have been able to source attractive investment opportunities and secure financing for them”.

Capital of the Harbert European Real Estate III fund has already been invested in the UK. In December last year Harbert was reported to have completed the purchase of the BSI Tower in Chiswick, West London. For that deal, Harbert teamed up with UK property company Canmoor to buy the 90,000 square foot property from The Carlyle Group for around £29 million (€33 million; $47 million).

For its part, Segro said the logistics assets were considered non-core in its portfolio. Justin Read, the firm’s group finance director said: “The completion of this disposal of regional assets marks another important step forward with the reshaping of our portfolio to focus on core markets.” According to Read, Segro has disposed of £377 million of non-core assets in the past year enabling it to meet its various debt obligations.