Tritax Big Box buys Royal Mail facility in Daventry – Tritax Big Box REIT has exchanged contracts to acquire a National Distribution Centre at Danes Way, Daventry International Rail Freight Terminal (“DIRFT”), Northamptonshire let to Royal Mail Group Limited, the main subsidiary of Royal Mail plc. The total consideration is GBP48.82 million (excluding purchaser’s costs), reflecting a net initial yield of 5.0%. The purchase is being funded from equity.
Purpose-built in 2003, this modern, high specification parcel delivery hub with a 24/7 on site operation provides a centrally located and adaptable National Distribution Centre to all Royal Mail parcel hubs across the UK. The cross-docked property has a gross internal area of 272,603 sq ft, an eaves height of between 6 and 13 metres, 360-degree circulation and an extensive service yard area, providing an exceptionally low site cover of c.18%. The investment has been acquired with an unexpired lease term of approximately 6 years, subject to annual upward only rent reviews indexed to the Retail Price Index capped at 3%. The next rent review is due in August 2018.
Situated within the ‘Golden Triangle’ of logistics, in a prime location, the property has excellent road, airport and rail connectivity. DIRFT is a rail-road intermodal freight terminal with associated logistics in Northamptonshire. DIRFT is located at the intersection of junction 18 of the M1 motorway, the A5 and A428 roads being 4 miles east of Rugby and 6 miles north of Daventry; it has a rail connection from the Northampton loop of the West Coast Main Line to other National and European Rail Freight Terminals. As an established core logistics location, it has attracted a significant number of major occupiers, including DHL, Eddie Stobart Logistics, Sainsbury’s and Tesco. The Company recently acquired the Royal Mail’s RDC for the Midlands at Atherstone.
DTRE represented the Company on the acquisition.
Colin Godfrey, Partner of Tritax, commented: “We are very pleased to have acquired our second Distribution Centre let to Royal Mail, which with annual upward rent reviews linked to RPI offers the potential for strong and frequent rental growth. The modern, high specification facility, which is situated in an established core logistics location, also has the potential for future value enhancement.”
The property was acquired from LondonMetric Property. They bought the warehouse for just £36m in 2014, equivalent to a net initial yield of 6.7%.
BBOX / LMP : Tritax Big Box buys Royal Mail facility in Daventry