Tritax EuroBox forward funds German logistics project for €30m

The company will now enter into a forward funding agreement to construct the building for a price of €30 mln comprising land purchase, construction of the buildings and developer’s profit. Pan-European logistics specialist Verdion will develop the facility.

There is the potential for an additional incentive payment to Verdion if certain leasing conditions are met.  From completion of the land purchase and during the construction phase, the buyer will receive from the developer an income return equivalent to the agreed net initial yield of 4.3%.  
 
Tritax will benefit from a 12-month rental guarantee provided by Verdion of €1.313 mln from completion of construction, which is expected to be in Q4 2022.  This rental guarantee is in line with the current estimated market rental value per annum assuming a rent of €56 per m2. The acquisition price reflects a net initial yield of 4.3% based on the income from the rental guarantee.  
 
The property will comprise a single building of 23,346 m2 of ground level logistics space with additional mezzanine and office accommodation, capable of being split into four separate, equally sized units.  The development will be undertaken by Verdion, which specialises in European industrial and logistics real estate. The land purchase is conditional on receiving the building permit and access rights which are both expected in the near-term.The development will be undertaken to high environmental standards, targeting a minimum BREEAM Very Good and DGNB Gold certification.
 
'We are delighted to continue to develop our relationship with Verdion, this being the third forward funded development we have worked on with them.  We remain committed to building up a significant presence in prime areas of the German market which are characterised by strong tenant demand coupled with low vacancy levels and very limited land supply, leading to growing rents,' said Alina Iorgulescu, Assistant Fund Manager of Tritax EuroBox.