Connect Group is set to complete a £9.9m deal with property firm Urban Logistics for the sale and leaseback of six of Tuffnells’ depots, in a move aimed to cut the company’s debt.

The six depots are located in Andover, Coventry, Leighton Buzzard, Newport, Perth and Plymouth.

Connect’s original aim to sell the entirety of Tuffnells’ property portfolio of 37 depots had to be scaled back this summer after it failed to find a buyer.

This latest deal is part of a new strategy to sell smaller tranches of Tuffnell’s estate, the group revealed today.

Announcing the deal, which is expected to be completed this week, Connect Group said the six depots will be leased back to Tuffnells on full repairing and insuring leases for 20 years, with the leases guaranteed by Connect Group.

Rent for the six will be charged at around £700,000 a year plus VAT.

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Connect Group chief executive Jos Opdeweegh said: “The sale and leaseback of this tranche of properties is another step in our strategic plan and ambition to reduce the group's net debt position."

He added: “We will continue to explore other possible sale and leaseback opportunities for the remaining Tuffnells freehold real estate portfolio.”

Tuffnells Parcel Express was bought by Connect Group in December 2014. The group’s other core business is Smiths News.

Connect Group specialises in high drop density early morning deliveries from its 78 distribution depots and mixed and irregular sized freight.

Last year the group saw annual profit nosedive by 200% after a failed restructuring of the business by the previous management team.

In August this year its failure to find a buyer for Tuffnells’ 37 depots prompted it to issue a warning that its performance since May has been “slightly below” market expectations.

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