Tritax EuroBox plc forward funds Logistics Capital Partners’ development of a prime logistics asset in the Netherlands, pre-let to top four global food retailer
Demonstrates further progress in strategy to invest in prime logistics locations in Western Europe
Tritax EuroBox plc (“Tritax EuroBox” or the “Company”) which invests in high-quality, prime logistics real estate, strategically located across continental Europe, announces that it has conditionally agreed the acquisition of a €144.26 million prime logistics asset in Roosendaal, the Netherlands, from Logistics Capital Partners (“LCP”), one of the Company’s main development and asset management partners. The asset is pre-let to a top four global discount supermarket retail group.
A modern and well located prime logistics asset
Roosendaal, strategically situated in the south east of the Netherlands, was ranked the third best Logistics Hotspot 2019 out of the 28 regions in the Netherlands (Source: Logistiek NL). This optimal location provides rapid connections to the ports of Rotterdam, Antwerp and Amsterdam. The area is characterised by strong tenant demand and low supply of new buildings.
Once complete, the asset will comprise a single property, divided into three units, built in three phases. It will have a total net rentable area of approximately 113,179 sqm built on a total site area of approximately 210,488 sqm.
Delivering attractive returns to shareholders, with further upside potential
This transaction is structured as a forward funding development opportunity, where the Company buys the land and funds the construction of the building under a fixed price contract.
- The total cost of the land and development expenditure is €144.26 million and reflects a net initial yield of 3.5%, after purchase costs and non-recoverable expenditure.
- All three units are already pre-let to a top four global discount supermarket retail group, on a single lease, expiring in November 2027.
- The lease will generate approximately €5.1 million annually on completion of all three phases and is initially annually indexed to Dutch CPI.
- The lease incorporates a rent review and option to extend for a further five years at the end of the sixth year of the lease term.
- This review allows the rent to increase to the prevailing open market level, with a cap of 10% above the existing (indexed) rent at that time.
LCP completed the construction of the first phase in December 2021, with completion of the second and third phases expected by 1 December 2022 and 1 April 2023, respectively. As part of the proposal, during the construction phase, LCP will pay the Company income equivalent to the expected rent, until practical completion.
Combined with strong ESG credentials
Strong ESG credentials are at the forefront of the asset’s design and build, meeting several of the Company’s sustainability objectives through a BREEAM Very Good certification and incorporating a number of sustainability initiatives, providing social and environmental benefits for staff and the locality.
Alina Iorgulescu, Assistant Fund Manager of Tritax EuroBox, commented:
“We are delighted to announce further deployment into a prime European logistics location, following the Swedish acquisition announced on 17 January. Today’s acquisition cements our commitment to acquire top quality assets in prime locations across Europe, all built to high ESG standards and accommodating leading international occupiers, whilst building our relationship with our partner Logistics Capital Partners.
"By negotiating a market rent review within the lease, we have an opportunity to capture the strong rental growth we are seeing in the Netherlands – as well as in other markets in Europe – where demand for high quality, modern logistics assets outstrips supply, which remains constrained, due to limited land availability in the right locations. We expect this rental growth to continue during the current lease term of the asset as well as creating strong income and capital growth potential and sustainable value for shareholders.”
Related party aspects of this proposed acquisition
The Company is acquiring the asset from LCP. As LCP is considered as a related party to the Company under the Listing Rules, the acquisition of the asset is subject to shareholder approval. A circular containing further information about the acquisition and a notice convening a General Meeting of the Company at which shareholders will be asked to vote in favour of a resolution to approve the proposed transaction will be posted to shareholders as soon as practicable.
Further details of the acquisition, including the key commercial terms, are set out in the appendix to this announcement.
or further information please contact:
Tritax Group
+44 (0) 20 8051 5070
Nick Preston
Mehdi Bourassi
Alina Iorgulescu
Maitland/AMO (Media enquiries)
James Benjamin
+44 (0) 7747 113 930
tritax-maitland@maitland.co.uk
