Tritax Big Box REIT has announced that it has completed the land purchase and exchanged contracts to provide forward funding for the development of a new distribution facility at Prologis Park, Fradley, Staffordshire. The development is pre-let to Screwfix Direct Ltd, whose ultimate parent is Kingfisher Plc The development represents an investment of £52.7 million, reflecting a net initial yield of 5.5% (net of acquisition costs to the Company). . Screwfix is the UK’s largest multi-channel retailer of trade tools, accessories and hardware products.
The company says that the site is situated in a key Midlands logistics location, adjacent to the A38 dual carriageway, providing excellent connectivity to the M6 Toll, M42 and M1 motorways and with close proximity to rail and air connections. The area has attracted a significant number of major occupiers including Bidvest Foodservice, DHL, Tesco, Wincanton and Yodel. The new facility will reportedly be completed to a high specification, comprising 562,000 square feet., with an eaves height of 15 metres, extensive parking, offices and a site cover of approximately 48%. The development will be Screwfix’s fourth UK distribution centre.
The company says that, upon practical completion of the construction, targeted for October 2017, the property will be leased to Screwfix on a new 10 year lease, subject to five yearly upward only open market rent reviews. During the construction phase, the Company will receive an income return equivalent to the agreed rent from the developer.
The development is being undertaken by Winvic Construction Ltd and guaranteed by Prologis UK Ltd on behalf of Tango Real Estate LLP, a joint venture vehicle between Prologis and Wittington Investments (Developments) Ltd. The land purchase has been funded by the Company from equity proceeds, with senior debt finance to be introduced in the near term. The company says that the investment is accretive to its dividend and brings the total portfolio to 35 assets.
Tritax Big Box REIT to forward fund Screwfix distribution facility at Prologis Park, Fradley, Staffordshire : BBOX