Tritax Big Box REIT has announced that it has exchanged contracts to acquire a National Distribution Centre, let to DSG Retail Ltd (part of the Dixons Carphone plc group), for £77.3m (excluding acquisition costs). The purchase, which is being funded from equity proceeds, reflects a net initial yield of 5.86%. Completion is expected to take place later today and senior debt finance expected to be introduced in the near term.
Tritax says that the property is one of two National DSG Distribution Centres located on Newlink Business Park in Newark, Nottinghamshire and forms part of DSG’s principal National Distribution hub for direct store replenishment, home deliveries and returns. The National Distribution Centre also accommodates DSG’s main service repair centre, which Tritax says has benefited from significant capital investment. This facility was purpose built for DSG in 2003. Tritax advises that the building has an eaves height of 12.25 metres, extensive parking and a substantial service yard. The facility has a gross internal floor area of 726k square feet and a low site cover of circa 37%. The property has an unexpired lease term of approximately 20 years with 3% per annum fixed rental increases received every five years.
Newlink Business Park is located two minutes from the A1 and A46 interchange, providing good motorway connectivity north and south via the A1/A1M and onto the M1. The site benefits from good rail services with Newark North Gate Station located less than two miles from the property.
Tritax says that the acquisition brings its portfolio to 28 Big Box logistics assets and is accretive to the portfolio’s current average net initial yield. The weighted average unexpired lease term across Tritax’s portfolio is approximately 16.5 years.
Tritax Big Box REIT to acquire DSG Retail’s National Distribution Centre in Newark : BBOX