Tritax Big Box REIT has acquired a temperature-controlled distribution unit within the Nursling Industrial Estate in Southampton, UK, for £44.2 mln (€50 mln).
The asset was bought for a net initial yield of 5.24%, in an off-market transaction with a UK real estate fund.
The 325,000 sq ft (30,190 m2) building provides extensive cold-store capabilities on a 20-acre site. It is let to Tesco on a 25-year lease expiring in January 2021 and provides a range of opportunities to deliver near-term value through asset management, including increasing value through agreeing a lease regear/new lease.
The £44.2 mln consideration will be financed through £24.2 mln of existing resources and the issue to the seller of 12 million new ordinary shares in the company at a price of 164.38 pence per share. This issue price represents a 6.2% premium to the 30 June 2020 EPRA NAV.
Colin Godfrey, CEO, Fund Management, commented: ‘This is a rare asset acquired off-market in a prime South Coast location next to the M27 motorway and close to the Port of Southampton. Benefitting from a strong existing tenant and a robust underlying occupational market, this building presents us with several attractive asset management opportunities which we expect will drive income and capital value growth.’
He added: ‘While the investment market for logistics assets continues to strengthen, there remain select attractive acquisition opportunities where significant value can be added through asset management.’
