Tuffnells agrees new sale and leaseback deal

Connect Group division, Tuffnells Parcels Express has agreed a £5.17 million sale and leaseback deal with Campus Overseas Corp. This is for two warehouses in Kent and Lancashire.

The Tuffnells deal follows another sale and leaseback deal in September with Urban Logistics REIT plc, raising £9.9 million from six distribution depots.

Across its estate, Connect Group has 78 distribution centres through its divisions Tuffnells Parcels Express and Smiths News.

Tuffnells operates out of 37 local collection and delivery distribution depots that came as part of the acquisition of the company in late 2014.

Connect Group’s property portfolio is mostly leasehold, and the sale of the Tuffnells properties brings the division into further alignment with the parent company.

According to Connect Group, the sale of the Tuffnells properties is to release funds to reduce the Group’s net debt.

Tony Grace, Chief Financial Officer of Connect Group, commented on the transaction: “The sale and leaseback of this second tranche of properties is another step in our strategic plan and ambition to reduce the Group’s net debt position to a targeted net debt/EBITDA ratio of 1x by FY2021 as announced on 22 January 2019.  We are pleased to be able to report that we have now exchanged contracts on a further two Tuffnells properties. We look forward to formally completing on each of these properties in due course and, furthermore, exploring other possible sale and leaseback opportunities for the remaining Tuffnells freehold real estate portfolio, where those opportunities meet the Board’s expectations in respect of value, economic return and timings.”

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