Menzies Distribution completes sale and leaseback of eight depots

UK time-critical logistics firm generated proceeds of almost £25m from the deal, which ‘will align these properties with the company’s remaining 47 leased properties across the UK and Ireland’.

UK time-critical logistics firm Menzies Distribution has completed the sale and leaseback of eight distribution depots across its UK logistics network in a transaction it said has generated proceeds of £24.65 million (US$30 million). 

Menzies said the sale and leaseback of the eight distribution depots will align these properties with the company’s remaining 47 leased properties across the UK and Ireland, “providing a consistent and flexible network of operating bases supporting the long-term growth and diversification of the company”. The purchaser of the property portfolio is Custodian REIT, a UK real estate investment trust. Its portfolio comprises properties predominantly let to institutional grade tenants on long leases throughout the UK.

The eight properties are located in local industrial areas in Aberdeen, Edinburgh, Glasgow, Ipswich, Norwich, Stockton on Tees, Swansea and Weybridge. They are part of Menzies Distribution’s UK wide network of 55 depots.

Greg Michael, Chief Executive Officer of Menzies Distribution, commented: “Since our acquisition by private equity firm Endless LLP in September 2018, the company has invested heavily into the retail logistics and parcel delivery markets. In July 2019 the company opened its new 170,000 sqft super-hub in Coventry which, together with its existing 55 depots, has given Menzies Distribution a market leading national footprint, covering from the highlands of Scotland through to its 100 strong electric vehicle fleet in central London.

“This transaction is a further positive step forward for Menzies Distribution, which will support and accelerate our continuing strategic and operational diversification over the coming months”

Paul McCourt, Chief Financial Officer of Menzies Distribution, commented: “In January 2019, we announced a new 5-year Revolving Cash Facility with RBS amounting to £25m which has yet to be utilised. With the continued profitability of the company since its sale from John Menzies plc in September 2018, and the generation of a further £25m in cash proceeds from this latest property transaction, the company has built a strong balance sheet to support our continued growth ambitions both organically and through acquisition.”

Menzies Distribution is one of the UK’s leading time-critical, national, multi-channel logistics partner delivering out-bound and in-bound stock and parcels for retailers, corporate clients and consumers, delivering in excess of 110 million consignments of retail stock, parcels, newsprint and marketing materials across the UK annually.

Source: Lloyd’s