Tritax Big Box REIT has acquired a Royal Mail distribution facility in Northamptonshire from LondonMetric for £48.8m – a net initial yield of 5%.
The 272,603 sq ft shed has been acquired with an unexpired lease term of approximately six years, subject to annual upward-only rent reviews indexed to the Retail Price Index capped at 3%. The next rent review is due in August 2018.
Purpose built in 2003, the property is situated at Danes Way, Daventry International Freight Terminal, in the “Golden Triangle” of logistics, with good road, rail and airport connectivity.
Tritax partner Colin Godfrey said: “We are very pleased to have acquired our second distribution centre let to Royal Mail, which with annual upward rent reviews linked to RPI offers the potential for strong and frequent rental growth. The modern, high-specification facility, which is situated in an established core logistics location, also has the potential for future value enhancement.”
Andrew Jones, chief executive of LondonMetric, said: “This asset has performed strongly, delivering an ungeared IRR of 15% pa. We will recycle the proceeds into our pipeline of investment and development opportunities, particularly in urban and regional logistics where we continue to see value and good prospects for further rental growth.”
DTRE represented Tritax.
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