Big shed specialist grows portfolio with £115m Midlands deal

A typical Tritax Big Box development

BIG shed specialist Tritax Big Box has exchanged contracts to acquire two large commercial units in the Midlands in a deal worth more than £115m.

The real estate investment trust (REIT) said it had reached an agreement with a major UK institution to acquire units at Birch Coppice, near Tamworth, and at Warth Park, Raunds, Northamptonshire.

The units are let to Euro Car Parts and Whirlpool UK Appliances respectively.

The combined purchase price is £115.5m, however, completion of the purchases is conditional upon the trust successfully completing the fundraising it announced last month. This is expected to happen by October 20.

Tritax said the purchases comprised two of the three assets noted as being under offer when it announced the fundraising. The trust said it expected contracts would also be exchanged on the third asset in the near term.

The facility at Birch Coppice Business Park is let to Euro Car Parts, whose ultimate parent company is NASDAQ-listed LKQ Corporation. The company is the largest provider of alternative automobile components in North America and the UK. The purchase price is £80.135m (excluding purchaser’s costs), reflecting a net initial yield of 5.04% on the asset acquisition.

Completed in January 2016 for Euro Car Parts as its new main national distribution facility, the property has benefited from significant capital investment from the tenant. Purpose-built to a high specification, it comprises an eaves height of 18 metres, offices, a secure trailer park and extensive parking. The facility has a gross internal floor area of approximately 780,977 sq ft.
 
The facility at Warth Park has been secured at a cost of £35.35m (excluding purchaser’s costs), reflecting a net initial yield of 6.6%.

The facility was completed in 2001 with a gross internal floor area of 473,263 sq ft and a low site cover of approximately 43%. It has benefited from significant capital investment from the tenant, including a 150,000 sq ft extension in 2006.

Colin Godfrey, partner of Tritax, said: “These acquisitions will add two new established covenants to the strong list of tenants in our portfolio, which will then comprise 33 Big Box assets.

“The Euro Car Parts’ new National Distribution facility will provide long term income in one of the most sought after locations within the ‘Golden Triangle’. The net initial yield of the Whirlpool facility will be accretive to our portfolio running yield and the short unexpired lease term presents an opportunity for value enhancement in an established logistics location upon re-letting or lease re-gear.”

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