Tritax Big Box REIT (Tritax) has announce that it has completed the land purchase and exchanged contracts to provide forward funding for the development of a new distribution centre at Signia Park, Didcot, Oxfordshire. The development is pre-let to Hachette UK Ltd (Hachette UK), a UK publishing company whose ultimate parent is Lagardere SCA. The development represents an investment of £29.24m, reflecting a net initial yield of 5.82% (net of acquisition costs to the Company).
Tritax says that the site is situated in a core South East logistics location, which benefits from excellent road and rail connectivity via the A34, M4 and M40 motorways and Didcot Parkway Rail Station respectively. Didcot has attracted a number of occupiers including Screwfix, XPO Logistics, and BetterBathrooms, as well as the Tesco Distribution facility in Southmead Industrial Estate, which was acquired by the Company in 2014.
The new development is to become Hachette UK’s main national and a global distribution centre and Tritax says that the property will benefit from significant capital investment from the tenant, including high levels of automation. It also says that the facility will be purpose-built to a high specification, with a gross internal floor area of approximately 242,067 square feet and an eaves height of 20 metres, together with extensive parking. The property has a low site cover of approximately 40%.
Upon practical completion of the construction, targeted for July 2017, Tritax says that the property will be leased to Hachette UK on a new 15-year lease, subject to five yearly upward only open market rent reviews. During the construction phase, Tritax will receive an income return equivalent to the agreed rent from the developer. The development is being constructed by Winvic Construction Ltd and being developed by Clowes Developments (UK) Ltd, the ultimate parent company for the developer. Tritax has funded the land purchase from equity proceeds. It says that it expects to introduce senior debt finance in the near term.
Tritax Big Box REIT to forward fund Didcot distribution centre for Hachette UK : BBOX