Tritax EuroBox has announced the forward funding of a new logistics asset near Stockholm, Sweden, for €27.9m.
The deal marks the company’s second acquisition in Sweden. The 13,181 sqm logistics facility, located just north of Stockholm, consists of two separate units of 8,204 sqm and 4,977 sqm, which will be constructed between November 2021 and December 2022. The development is being undertaken by Verdion, a highly experienced European industrial and logistics real estate specialist, which has recently expanded into the Nordic area opening offices in Sweden and Denmark and has a growing number of projects in the Nordics. The land purchase is conditional on receiving the building permit which is expected in the near-term.
The acquisition is structured as a forward funding development opportunity, where the company will buy the land initially and then fund the construction of the buildings. The total development cost is capped at SEK 284 million (€27.9m). From completion of the land purchase and during the construction phase, the company will receive from the developer an income return equivalent to the agreed net initial yield of 4.2% and will also benefit from a 12-month rental guarantee of €1.18m from completion of construction which is estimated to be in December 2022. This rental guarantee is in line with the current estimated market rental value per annum assuming a rent of €89 per sqm.
The ESG credentials of the development will be strong, targeting a minimum BREEAM Very Good certification, and the construction will include a range of energy saving initiatives and staff wellbeing measures.
Alina Iorgulescu, assistant fund manager of Tritax EuroBox, said: “We are delighted to acquire our second asset in Sweden, following the acquisition of the Gothenburg asset in June this year, building up our presence in this important market, which we expect to continue to perform well due to strong fundamentals. Tenant demand is strong and land supply is constrained in the prime markets in Sweden such as Stockholm and Gothenburg where we are investing.
“Acquiring assets using a forward funding structure is an effective way of accessing the best assets in the best locations at prices discounted to the market. We expect both assets to perform well and deliver good value to our shareholders.”
EBOX : Tritax EuroBox grows Nordic exposure with €27.9m deal