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Tritax EuroBox sells Swedish scheme at substantial premium

Tritax EuroBox (EBOX) has exchanged contracts for the sale of its redevelopment site in Malmö, Sweden to a data centre owner-occupier for a headline price of SEK320 million (€28m).

The net sale price is 39% above the valuation as at 31 March 2023.

EBOX acquired the property with the intention of redeveloping the site for a logistics scheme of c.60,700 sqm. However, market conditions have weakened, with the expected returns from the development not now as compelling as selling the site for an alternative use.

The sale is also 14% above the acquisition price, net of transaction costs and developer-partner fees.

Proceeds will be primarily used to pay down debt as part of the group’s programme to reduce leverage.

Earlier this year, the company set out its intention to undertake asset disposals of at least €150m over the following 12-18-month period. The programme’s aim is to lower the loan to value (LTV) ratio towards a preferred percentage range in the low 40s and to fund existing opportunities from within the portfolio.

Following the disposal of Hammersbach in the summer, and the recently announced sale of Bochum, this transaction brings gross sales signed so far to €139m.

Company commentary

Alina Iorgulescu, investment director at Tritax EuroBox, commented: “The sale of Malmö is the third asset sold as part of the disposal programme outlined in our interim results. The sale reflects our conclusion that potential returns from the necessary capital investment for the redevelopment of the site were less attractive than disposing of the site for an alternative use and realises profits sooner than anticipated. The transaction is aligned with our strategy of recycling capital to reduce leverage and provides further evidence of Tritax EuroBox’s disciplined approach to capital allocation. Further disposals have been identified and we remain confident of achieving our target loan to value percentage of low 40s over the next six to 12 months.”

EBOX : Tritax EuroBox sells Swedish scheme at substantial premium

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