Tritax Big Box REIT has bought a distribution unit within the Nursling Industrial Estate in Southampton, for £44.2m.
The price of the 325,000 sq ft cold storage unit reflects a net initial yield of 5.24%. It is let to Tesco on a 25-year lease expiring in January.
Tritax said the unit provided a range of opportunities, including increasing its value through a new leasing or re-gearing deal and enhancing the asset through a configuration and green initiatives.
The off-market acquisition will be financed through £24.2m of existing resources and a share issue of 12,166,930 shares, priced at 164.38p, to the UK property fund selling the unit. The share price represents a 6.2% premium to Tritax’s EPRA NAV on 30 June.
Colin Godfrey, chief executive of fund management at Tritax, said: “This is a rare asset acquired off-market in a prime south coast location next to the M27 motorway and close to the port of Southampton.
“Benefitting from a strong existing tenant and a robust underlying occupational market, this building presents us with several attractive asset management opportunities which we expect will drive income and capital value growth. While the investment market for logistics assets continues to strengthen, there remain select attractive acquisition opportunities where significant value can be added through asset management.”
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