Tritax Big Box REIT has exchanged contracts to forward-fund the development of two new distribution facilities in the UK's East Midlands for £101.8 mln (€120 mln).
The warehouses, located at Warth Park, Raunds in Northamptonshire, are pre-let in their entirety under two separate 30-year leases to Howdens Joinery Group. The investment price reflects a net initial yield of 5.1% (net of land acquisition costs).
'We are pleased to be working with Roxhill again and investing in the second phase of Howdens’ new distribution centre, following the successful completion of the first phase which the Company also forward funded in September 2015,' commented Colin Godfrey, partner of Tritax. 'Once completed, these three facilities will provide Howdens with a ‘centre of excellence’ for its supply chain operations which is expected to deliver very significant operational and efficiency benefits,' he added.
The facilities will have a gross internal floor area of 62,700 m2 and 27,870 m2 respectively, extensive offices and a combined site cover of about 53%.
The development is being undertaken by Roxhill. The land purchase will be funded by Tritax from equity proceeds, with senior debt finance to be introduced in the near term.
'This investment is in an established logistics location with a strong covenant and extends the weighted average unexpired lease term of the company's portfolio to about 16 years. This represents our ninth and tenth pre-let forward funded development and brings our total portfolio to 37 assets,' concluded Godfrey.
