Tritax Big Box REIT has announced that it has exchanged conditional contracts to acquire the land and provide forward funding for the development of a new distribution warehouse facility, pre-let in its entirety to Howden Joinery Group Plc, the parent group of the UK’s leading supplier of kitchens and joinery. The investment price is £67m, reflecting a net initial yield of 5.03% (net of land acquisition costs).
The site is strategically located at Warth Park in Raunds, Northamptonshire on the A45 corridor approximately three miles from J13 of the A14, which provides access to the ports of Felixstowe and Harwich and also directly links to the A1(M) dual carriageway and the M1 motorway. The site is also close to Northampton and Thrapston, which have a strong Big Box logistics presence and demand, with existing major distribution occupiers including Homebase, Morrisons and Primark.
The new distribution facility will comprise a gross internal area of approximately 655,000 sq ft., across a site of approximately 32.52 acres, reflecting a site cover of c.46%. The building will include modern specifications with cross docking and an eaves height of 15 metres.
Upon practical completion, the facility will be leased to Howdens on a new 30 year lease, without break, subject to upward only open market rent reviews every five years. During the construction phase, the Company will receive a developer finance rate of 5% on the funds expended by the Company during the construction process.
The development is being undertaken by Roxhill, a specialist UK industrial and distribution warehouse developer. Construction of the main works is expected to commence in September 2015 with practical completion of the construction targeted for June 2016. The land purchase will be funded by the Company from equity proceeds, with senior debt finance expected to be introduced in the near term.
BBOX : Tritax in pre-let development for Howden Joinery