Tritax EuroBox has agreed a deal to fund the development of an €117.9m logistics asset in the Rhine-Ruhr region in Germany.
The development, in Bönen, will comprise 66,065 sqm of space and is pre-let to the Rhenus Warehousing Solutions SE & Co KG, one of the leading global logistics service providers, on a 15-year lease. The lease will generate a total annual rent of around €4.1m, with the net initial yield of the project being 3.5%.
The property will comprise six purpose-built logistics units and is expected to be completed in February 2023. The transaction is structured as a forward funding development opportunity, where the company will buy the land initially and then fund the construction of the building under a fixed price contract.
The total cost of the land and development expenditure is capped at €117.9m. From receipt of the building permit expected by February 2022 and during the 12-months construction phase, the company will receive from the developer an income return equivalent to the agreed net initial yield.
The deal was sourced through the company’s exclusive relationship with developer Dietz, where it gets first refusal on the developer’s huge development pipeline in Germany.
Alina Iorgulescu, assistant fund manager of Tritax EuroBox, said: “The Rhine-Ruhr region of Germany is the largest population centre in the country and is an area which benefits from excellent transport connectivity and strong supply / demand fundamentals. This is the 10th German investment in the Tritax EuroBox portfolio, bringing our total amount invested in the country to just over €700m, providing significant critical mass in the most important logistics market in Europe. This off-market funding, developed by our long term development partner Dietz AG, is at an attractive yield which also offers the opportunity to capture the rental growth evident in the prime German logistics market.”
EBOX : Tritax EuroBox to fund €118m German development