Further Statement re: Neckermann

RNS Number : 9861H

SEGRO PLC

18 July 2012

 

18^th July 2012

Further statement re: Neckermann

In a press release published today, Neckermann.de GmbH ('Neckermann'), the Frankfurt based mail-order company, announced that it will today file for insolvency proceedings.

This follows an announcement on 27 April 2012 in which Neckermann advised that, in order to remain viable, it needed to restructure its operations around its e-commerce offering.

SEGRO owns a 309,000 sq m facility in Frankfurt, of which 291,000 sq m is currently occupied by Neckermann. This principally houses the company's head office staff, together with its catalogue and clothing operations. In 2011, rental income received from Neckermann in respect of the site totalled approximately £12 million.

Since April 2012, SEGRO has been in extensive discussions with Neckermann and its owner, Sun Capital Partners, Inc., regarding the Frankfurt lease and future plans for the site. SEGRO has been both proactive and constructive in exploring ways to restructure Neckermann's lease (which expires in October 2017) in order to help address the company's financial situation and accommodate its recent plans to reduce its Frankfurt operations.

Neckermann's decision to file for insolvency proceedings means that SEGRO must now however await further developments in order to clarify Neckermann's future requirements. 

Rent has been paid by Neckermann up to the end of July 2012.  SEGRO holds bank guarantees which should cover rent and other amounts due in respect of the site over the remainder of 2012, in the event of future non-payment by Neckermann.

SEGRO is seeking to identify both alternative customers and alternative uses for the Frankfurt site in the event that Neckermann exits the facility. However, given the bespoke nature of much of the facility, there is a significant risk that, from the beginning of 2013, SEGRO will be unable, at least in the short term, to replace the rent currently being generated from Neckermann.

At 31 December 2011, the Frankfurt site was valued at £86 million. In light of recent events, including the assumption that Neckermann will vacate the site, SEGRO's independent valuers, CBRE, indicate that this will fall to approximately £43 million as at 30 June 2012.

Neckermann also leases from SEGRO a logistics facility at Alzenau, approximately 35 kms east of Frankfurt. This 25,000 sq m building has, in turn, been sub-let by Neckermann to a third party until the end of 2012 to support a logistics activity unrelated to Neckermann's business. In 2011, rental income received in respect of this building totalled approximately £0.8 million. SEGRO holds a bank guarantee covering 3 months rent in the event of non-payment by Neckermann and in due course expects to be able to re-lease this space in the event that the Neckermann lease is terminated.

SEGRO will update the market further when appropriate.

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For further information please contact:

SEGRO

Justin Read - Finance Director:  + 44 (0) 207 451 9110

Eleanor Johnson - Group Communications Manager: + 44 (0) 207 451 9113

Tulchan

John Sunnucks/David Shriver: [phone]

About SEGRO:

SEGRO is Europe's leading owner-manager and developer of industrial property. The Group is a Real Estate Investment Trust (REIT), listed on the London Stock Exchange. SEGRO's portfolio comprises £5.1 billion (as at 31 December 2011) of predominantly industrial and warehouse assets concentrated in and around major business centres and transportation hubs such as ports, airports and motorway intersections. The Group serves over 1,600 customers spread across many geographies and different industry sectors. It has 5.5 million sq m of built space and a passing rent roll of £334 million (as at 31 December 2011).  For further information see www.SEGRO.com

 

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