Tritax EuroBox is looking to raise £170m (€200m) to acquire further assets, after also announcing today that it will forward fund a logistics development in the Ruhr region of Germany.
The proposed placing of 152.5 million shares will be at an issue price of 111.5 pence, representing a discount of 3.0% to the closing share price of 115 pence on 9 September 2021 and a premium of 3.7% to the estimated unaudited IFRS NAV per share as at 30 June 2021 of €1.265 converted at prevailing exchange rates.
The manager, Tritax Management, expects to use the net proceeds of the placing, together with existing resources and debt, to secure the acquisition of a near-term investment pipeline of €520m of prime big box logistics assets in key locations in Continental Europe comprising:
- Two German assets for over €170m which are in exclusivity and in the final stages of due diligence.
- Six further assets for €350m including zoned development land and forward funding developments.
The manager hopes the proceeds will be deployed within three to four months.
It has been a busy period of growth for the company, and since its last equity raise in March 2021 it has:
- Generated a total shareholder return of 13.1% (4 March 2021 – 9 September 2021, 26.8% annualised).
- Been awarded an Investment Grade credit rating by Fitch (BBB-).
- Issued its debut €500m 5 year Green Bond at a 0.95% annual coupon reducing its weighted average cost of debt from 2.3% to 1.3%.
- Deployed €391m into five acquisitions, including its first Nordic investment and two value add developments.
- Increased its asset management activity with the start of the Mango, Barcelona extension and the completion of the Bornem forward funded development.
- Continued to make progress on sustainability objectives across the portfolio; and
- Achieved 100% rent collection over the last two years.
The group is expected to announced the result of the placing on 20 September.
Forward funding acquisition
The group also announced today that it has entered into conditional contracts to acquire the land for the development of a new logistics asset in Oberhausen, a prime location in the Rhine-Ruhr region of Germany. The company will enter into a forward funding agreement to construct the building.
The property, the company’s eighth German asset, will comprise a single building of 23,346 sqm of ground level logistics space with additional mezzanine and office accommodation, capable of being split into four separate, equally sized units.
The development will be undertaken by Verdion, which specialises in European industrial and logistics real estate. The land purchase is conditional on receiving the building permit and access rights which are both expected in the near-term.
Oberhausen, located between Duisburg and Essen, is one of the cities forming the Rhine-Ruhr area, the largest urban area in Germany with a population of over 10 million. Oberhausen offers easy access to national autobahns 3 and 42, with connections across the region as well as direct routes across Germany and into the Netherlands and Austria. Duisburg port, the largest inland port in the world, is only 15 minutes down the Ruhr river.
The company has agreed an aggregate fixed purchase price of €29.9m comprising land purchase, construction of the buildings and developer’s profit. There is the potential for an additional incentive payment to Verdion if certain leasing conditions are met. 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.
The company will also benefit from a 12-month rental guarantee provided by Verdion of €1.313m from completion of construction, which is expected to be in Q4 2022. This rental guarantee is in line with the current estimated market rental value per annum assuming a rent of €56 per sqm.
The development will be undertaken to high environmental standards, targeting a minimum BREEAM Very Good and DGNB Gold certification.
The acquisition price of €29.9m reflects a net initial yield of 4.3% based on the income from the rental guarantee.
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