Tritax Big Box REIT, a real estate investment trust, said it exchanged contracts — conditional on receiving planning consent — to provide forward funding for two large distribution warehouses at Warth Park, Raunds, Northamptonshire.
The giant warehouses have been pre-let to Howden Joinery Group, parent company of the leading kitchen supplier of the same name.
Tritax said the investment price is £101.8 million, reflecting a net initial yield of 5.1% net of land acquisition costs.
It said both warehouses would be leased to Howden on two new 30 year leases “subject to five yearly upward only open market rent reviews.”
“Warth Park, at Raunds, Northamptonshire is strategically located on the A45 corridor close to J13 of the A14, which provides access to the ports of Felixstowe and Harwich and also directly links to the A1(M) dual carriageway and the M1 motorway,” said Tritax.
“The site is currently host to two logistics facilities recently acquired by the company let to Whirlpool and Howdens; other notable nearby distribution facility occupiers include Homebase, Morrisons and Primark at Wellingborough, Northampton and Thrapston respectively …
“The two distribution facilities, which will stand adjacent to one another and to the company’s existing Howdens facility, are under separate freehold titles and will be completed to a high specification with gross internal floor areas of 657,000 sq ft and 300,000 sq ft, respectively.”
Tritax Big Box REIT said it is the only listed vehicle to give pure exposure to the “Big Box” logistics asset class in the UK.
The development will be undertaken by Roxhill, which delivered the previous Howdens facility on time and on budget.
The land purchase will be funded by Tritax “from equity proceeds, with senior debt finance to be introduced in the near term.”
Colin Godfrey, partner of Tritax, said: “We are pleased to be working with Roxhill again and investing in the second phase of Howdens’ new distribution centre, following the successful completion of the first phase which the company also forward funded in September 2015.
“Once completed, these three facilities will provide Howdens with a ‘centre of excellence’ for its supply chain operations which is expected to deliver very significant operational and efficiency benefits.
“This investment is in an established logistics location with a strong covenant and extends the weighted average unexpired lease term of the company’s portfolio to c.16 years.
“This represents our ninth and tenth pre-let forward funded development and brings our total portfolio to 37 assets.”