Tritax funds new Durham logistics facility – Tritax Big Box REIT has completed contracts for the forward funded development of a new logistics fulfilment centre at Integra 61, near Durham, pre-let to a “financially robust world leading retailer” [Amazon?]. The price represents a maximum commitment of GBP147.3 million, reflecting a net initial yield of 5.25% (net of standard acquisition costs).
The development will have a gross internal floor area of c.1,992,061 sq. ft. inclusive of three structural mezzanine floors and a low site cover of c.32%. The facility will be cross-docked with an eaves height of over 20 metres. The property will also benefit from significant capital investment by the occupier, including high levels of automation.
The site is said to have excellent road connectivity with direct access onto Junction 61 of the A1(M) and is also easily accessible by air or rail, being located close to Durham Tees Valley Airport, Newcastle International Airport and Durham railway station. The location is also near to the ports of Tees, Hartlepool, Sunderland and Tyne.
Construction is being carried out by the Citrus Group, who are also developing the rest of the 200 acre Integra 61 project. Practical completion of construction work is targeted for summer 2020. The occupier will then take up a new 20-year lease, subject to five yearly upward only rent reviews indexed to the Consumer Prices Index (collared at 1% pa and capped at 3% pa). During the construction phase, Tritax Big Box will receive an income return equivalent to the annual rent from the developer [but funded ultimately by Tritax Big Box REIT].
Colin Godfrey, partner of Tritax, commented: “We worked very closely with our occupier customer to deliver this state-of-the-art, pre-let development, which provides the company with further exposure to a market leading occupier. Strategically located in an increasingly important logistics location with a strong labour supply, this asset, once operational, will be the largest single let logistics facility outside the South East, as well as one of the most technologically advanced fulfilment centres in the UK, whilst providing further exposure to a high calibre tenant on a long lease.”
BBOX : Tritax funds new Durham logistics facility