EAST Yorkshire joinery group Howdens has pre-let a 655,000 sq ft distribution facility on a 30-year lease.
The agreement will see Tritax Big Box REIT invest £67m as it forward funds the development in Northamptonshire after Howdens signed a 30-year lease with no break clause. The deal reflects a net initial yield of 5.03%.
Colin Godfrey, partner of Tritax, said: “We are excited to be investing in a new national distribution centre for Howdens, which provides further tenant and geographic diversification. The investment also increases the weighted average unexpired lease term and is accretive to our running yield.”
Roxhill has been appointed to lead the development, which is expected to be completed next June. It will give Howdens a major distribution centre alongside retailers including Morrisons, Primark and Homebase which has access to the ports of Felixstowe and Harwich on the A45 corridor.
Howdens has been growing strongly, and in its last financial year sales rose 14% to surpass £1bn for the first time in its 20-year history. Pre-tax profits grew even faster, up 40% to £189m.
It added 30 depots in 2014 and plans to open the same number this year as it continues to increase the number of UK depots above 600 and towards its target of more than 700. It has also extended its trial of depots in France and will add up to seven more this year while two already open in Belgium will continue.
The group was founded in Yorkshire and still manufactures kitchens in Howden, as well as operating dozens of depots across the region. Around one-third of the products its sells are manufactured at its factories in East Yorkshire and Runcorn, Cheshire.
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