Industrial REIT Segro has bought a retail park on the outskirts of London for £120M, with a view to converting it to warehouses or data centres.

The retail park purchased is Bath Road Shopping Park in Slough, bought from Royal London Asset Management.

The retail park is located next to the Slough Trading Estate, the giant industrial park owned by Segro, and covers approximately 11.4 acres. It includes 10 retail warehouse units, roughly one-third of which are currently vacant and provide immediate opportunities for asset management or redevelopment initiatives, Segro said, with the remaining leases expiring between 2023 and 2028.

The relatively short lease terms of the retail units create an opportunity to redevelop the site into modern warehousing suited to a variety of users, including data centres, Segro said.

In 2020, fellow industrial giant Prologis paid £86M for two outer London retail parks in two separate deals, one in Edmonton, north London, and one in Chingford, east London. Both have the potential for conversion to warehousing.

Ballymore paid £75M in June 2020 for a shopping centre in Edgware, north London, which it will convert into a scheme that could comprise as many as 3,500 homes.

Segro was represented by Knight Frank and CMS. CBRE and GunnerCooke advised Royal London.