Big shed specialist grows West Midlands portfolio with £92m acquisition
Big shed specialist Tritax Big Box has expanded its West Midlands portfolio with the purchase of a 700,000 sq ft logistics hub in a deal worth more than £92m.
The company, which is already behind two major logistics projects in the region, has invested £92.33m on the retail distribution facility at Birch Coppice Business Park, Dordon.
The hub serves the online retail arms of both Ocado and Morrisons.
Tritax said the price reflected a net initial yield of 5.25% on the asset acquisition. The purchase is being funded from equity, and Morrisons will act as guarantor.
The facility was purpose-built for Ocado in 2012 and comprises one of its four principal temperature controlled Customer Fulfilment centres. The building has a gross internal area, including the mezzanine floors, of over 700,000 sq ft, an eaves height of 16 metres and a low site cover of c.23%. The building has benefited from significant capital investment incorporating a high level of automation.
The investment has been acquired with an unexpired lease term of approximately 21 years, subject to annual upward rent reviews indexed to the Consumer Price Index and capped at 3.5%.
Birch Coppice lies within the region’s ‘Golden Triangle’ of logistics and is considered one of the UK’s leading rail connected distribution parks, with direct access to the Birmingham Intermodal Freight Terminal, one of the UK’s most efficient rail freight terminals.
The property also has good airport and motorway connectivity with close proximity to the region’s motorway network and both Birmingham and East Midlands airports.
As an established core logistics location, Birch Coppice has attracted a significant number of major occupiers, including Bunzl, HiB, Volkswagen Group and UPS, in addition to the distribution facility let to Euro Car Parts.
Colin Godfrey, partner of Tritax, said: “The acquisition of this Morrisons’ distribution facility, operated by Ocado, builds upon our strong working relationship with both retailers. The property will provide long term income in one of the most sought after locations within the ‘Golden Triangle’ providing access to 85% of the UK within 4.5 hours.”
The 543,692 sq ft factory the company is developing in South Staffordshire for automototive component manufacturer Gestamp is due to be completed next month and it will be followed in the autumn by a 561,767 sq ft warehouse in Fradley, being let to Screwfix.