Tritax Big Box REIT has bought a logistics facility let to Tesco for £44.2m, funded through cash and the issue of new shares to the vendor.
The group has acquired the temperature controlled distribution unit in Southampton from a “UK real estate fund” at a net initial yield of 5.24%.
The £44.2m acquisition will be financed through £24.2m of existing resources and the issue to the seller of 12,166,930 new ordinary shares in the company at a price of 164.38 pence per share.
This issue price represents a 6.2% premium to the 30 June 2020 EPRA NAV, but a slight discount to last night’s closing price of 165.1 pence.
The 325,000 sq ft building has extensive cold-store capabilities and is located on a 20 acre site. It is let to Tesco until January 2021. Tritax Big Box said it believed the site provides a range of opportunities to deliver near-term value through asset management, where it can re-let the space at a higher rent than it currently produces.
Colin Godfrey, fund manager, said “Benefitting from a strong existing tenant and a robust underlying occupational market, this building presents us with several attractive asset management opportunities which we expect will drive income and capital value growth. While the investment market for logistics assets continues to strengthen, there remain select attractive acquisition opportunities where significant value can be added through asset management.”
BBOX : Tritax Big Box makes £44m part cash, part shares acquisition of logistics hub
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