Property investment vehicle spends £43.43m at Stoke scheme

PROPERTY investment vehicle Tritax Big Box REIT has spent £43.43m on land purchase at Prologis Park in Stoke-on-Trent and forward funding for the development of a new distribution warehouse.

The facility is a pre-let for home furnishings retailer Dunelm.

The investment price reflects a yield of 5.47% (net of land acquisition costs).
 
Dunelm’s new distribution facility will comprise a gross internal floor area of 526,426 sq ft. across a site of 24.89 acres.

The building will incorporate modern specifications with cross docking and an eaves height of 15 metres. Dunelm also intends to commit significant capital into this new property.

The retailer already occupies two smaller units nearby, together totalling approximately 500,000 sq ft.

When combined with this new site, these three buildings, totalling approximately 1 million sq ft., will form Dunelm’s national distribution centre for the whole of the UK.
 
Upon practical completion, the facility will be leased to Dunelm (Soft Furnishings) on a new ten-year lease, subject to a five yearly upward only open market rent review after five years.

During the construction phase, the Company will receive an income return equivalent to the rent from the developer.
 
The development is being undertaken by Prologis UK on behalf of Tango Real Estate, a joint venture vehicle between Prologis and Wittington Investments (Developments).
 
Dowley Turner Real Estate represented the Company and JLL represented the vendor.
 
Colin Godfrey, partner of Tritax, said: “We are excited to be investing in a new best in class distribution warehouse facility for Dunelm, which is making a significant capital investment into the fit-out of its facility.

“We look forward to working with Prologis to deliver a strategically important new logistics hub for Dunelm at this key logistics location, an area which has attracted many other major occupiers resulting in some of the highest levels of activity over the past year.”