Tritax Big Box REIT is investing £98.8m to build a new distribution warehouse facility for Ocado. The facility will be located inside the M25 at Crossdox, Bronze Age Way, Erith, on the south side of the River Thames and A2016, with Central London approximately 12 miles to the West and Tilbury Docks and DP World container port to the East.
Ocado has signed an agreement to lease, conditional upon detailed planning, for a new 30 year lease, without break, subject to five yearly rent reviews indexed to RPI (capped and collared). During the construction phase, the Company will receive an income return from the developer.
The 35 acre site will be the location of an important South East logistics hub for Ocado to help fulfil its growing capacity needs in London and the South East. The investment will comprise a new distribution warehouse, with a gross internal area of approximately 560,000 sq ft, reflecting a site cover of c. 45%. The development is being undertaken by Bericote Properties.
Completion of the investment purchase is expected to take place in the spring of 2015 when construction of the main works will commence, with practical completion of the developer’s base build targeted for the summer of 2016. The purchase will be funded by the Company out of equity with senior debt finance expected to be introduced in the near term.
The initial yield on the facility is expected to be 5.25%.
BBOX : Tritax building new facility for Ocado