Tritax Big Box exchanges contracts on new Warth Park development
Tritax Big Box announced on Friday that it has exchanged contracts - conditional on receiving planning consent - to provide forward funding for the development of two new distribution warehouse facilities at Warth Park, Raunds, pre-let in their entirety under two separate leases to Howden Joinery Group.
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The FTSE 250 real estate investment trust said the investment price is £101.8m, reflecting a net initial yield of 5.1% net of land acquisition costs.
Upon practical completion of the construction, targeted for August 2018, both properties will be leased to Howdens on two new 30 year leases, subject to five yearly upward only open market rent reviews.
Tritax’s board said 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.
The site is currently host to two logistics facilities recently acquired by the company let to Whirlpool and Howdens, with other notable nearby distribution facility occupiers including Homebase, Morrisons and Primark at Wellingborough, Northampton and Thrapston respectively.
It said 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.
Both buildings will have an eaves height of 15 metres, extensive offices and a combined site cover of approximately 53%.
The development will be undertaken by Roxhill which successfully delivered the previous Howdens facility on time and on budget.
Tritax will fund the land purchase from equity proceeds, with senior debt finance to be introduced in the near term.
“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,” said Tritax partner Colin Godfrey.
“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.”
Godfrey said the 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 around 16 years.
“This represents our ninth and tenth pre-let forward funded development and brings our total portfolio to 37 assets.”