Tritax Big Box REIT (BBOX) toasts £90m acquisition of the largest wine production warehouse in Europe.
The 872,000 sq ft facility in Avonmouth, in the South West of England, is let to Accolade Wines with 13 years on the lease and was acquired at a net initial yield of 5.1%.
Accolade Wines is one of the world’s largest wine companies by volume and the leading producer and distributor of wine in the United Kingdom and Australia. The building is a key component of its supply chain used for receiving then bottling wine for sale into the key UK and European markets.
The building is the largest wine production, warehouse and distribution centre in Europe, distributing to all major UK supermarkets and European markets and providing approximately 20% of the UK’s wine supply.
The acquisition increases BBOX’s exposure to the “increasingly important” South West of England. Avonmouth is the principal logistics and manufacturing area for the South West, and a planned deep-sea container terminal at Avonmouth is expected to double the capacity of the docks over the next 10 years.
It said the area has low vacancy rates due to rising occupier demand driven by excellent transport links with the M5, M4 and M49 motorways enabling access to over 85% of the UK’s population within 4.5 hours and further supported by strong and rising demand from the port.
The asset offers 12.8 years of unexpired lease term, with five-yearly rent reviews providing a minimum of CPI uplifts. It also provides opportunities to add further value through a potential lease extension, and ESG related asset management initiatives aligned to Accolade Wine’s commitment to Net Zero Carbon.
Colin Godfrey, fund manager, said: “In line with our strategy, we continue to monitor the market closely for attractive acquisition opportunities. This is a key asset, let to one of the world’s largest wine companies by volume, in a strong and increasingly important location for logistics in the UK.
“This state-of-the-art asset, acquired off-market, provides a valuable and long-term income stream. The tenant has committed heavily to this award-winning facility, which is the largest wine warehouse and distribution centre in Europe. Thanks to a combination of buying well, strong market fundamentals and opportunities for value enhancing asset management initiatives, we believe this building will deliver a very attractive return to our shareholders.”
BBOX : Tritax Big Box toasts £90m acquisition