Tritax buys Royal Mail distribution facility
Tritax buys Royal Mail distribution facility – Tritax Big Box REIT has acquired a Regional Distribution Centre at Riversdale Road, Atherstone let to Royal Mail Group Limited. The total consideration is GBP32.68 million (excluding purchaser’s costs), reflecting a net initial yield of 6.1% on the corporate acquisition. The purchase is being funded from equity.
The facility provides a centrally located and adaptable Regional Distribution Centre in the Midlands. The building has recently benefited from significant capital investment with further capital investment committed to by the tenant for its occupation. The cross-docked property has a gross internal area of 381,091 sq ft, an eaves height of between 9 and 10 metres, 360-degree circulation and an extensive service yard area, providing a low site cover of c.35%. The investment has been acquired with an unexpired lease term of approximately 10 years, subject to upward only five yearly open market rent reviews. The next rent review is due in September 2021.
Located in Atherstone, 21 miles north-east of Birmingham, the facility is situated within the ‘Golden Triangle’ of logistics. The property has excellent road, airport and rail connectivity, with accessibility via the A5 to the M42, M69, M6, M1 motorways, close proximity to Birmingham International and East Midlands airports and direct rail links to London. As an established core logistics location, it has attracted a significant number of major occupiers, including Aldi, Jaguar Land Rover and TNT. The company’s two distribution facilities in Birch Coppice, five miles away are let to Euro Car Parts and Morrisons.
DTRE represented the Company on the acquisition.
Colin Godfrey, Partner of Tritax, commented: “We are delighted to have acquired the Royal Mail’s Regional Distribution Centre for the Midlands at an attractive yield which is accretive to our portfolio income yield and which offers the potential for strong rental growth in 2021 as well as opportunities for future value enhancement. The facility, which is situated in an established core logistics location, has already recently benefited from significant capital expenditure with further investment committed to by the tenant. The Royal Mail provides an additional strong and established covenant and we are delighted to add Royal Mail to the high calibre list of tenants already represented in our portfolio.”
BBOX : Tritax buys Royal Mail distribution facility