Tritax Eurobox has acquired two recently developed prime logistics properties and development land, positioned in the core logistics location of Strykow, near Lodz in central Poland for €51.8m (phase I) with the potential to invest a further €15m developing the adjacent phase ii land. the corporate acquisition reflects a net initial yield of 6.1% (net of acquisition costs to the company) and has the potential to add value through the letting of vacant units and development of the land.
Following the acquisition of the Castorama logistics facility in April last year, this off-market investment increases Tritax Eurobox’s presence in Strykow, which is one of Poland’s largest logistics markets and a key logistics hub in the Central and Eastern European region. Strykow is close to the A1/A2 road intersection allowing access to Poland’s main arterial roads. The location has seen rapid take-up in the last five years by numerous blue-chip tenants. This asset offers scope for income growth off a low base and value enhancement through identified asset management opportunities.
Phase I comprises 55,447m² let to three tenants, with 22,213m² of currently vacant space. This reflects a weighted average unexpired lease term of 5 years to expiry (4.5 years to break). All rents are subject to annual upwards only indexation to 100% of local CPI. The first building offers 43,218m² let to Arvato Polska until January 2025 with tenant break option in January 2024. The second building offers 8,942m² let until July 2029 to Stalatube a leading provider of stainless-steel solutions. A further 3,287m² is let to the Polish operations of German packaging company, Tillmann Wellpappe, until July 2029 with a parent company guarantee.
Phase II of the asset is an adjacent plot of land of approximately 45,000m² suitable for constructing a building with a GIA of approximately 22,400m². The company has entered into a funding agreement with the vendor to bring forward development of this phase on letting, increasing the company’s investment in the asset by approximately €15m.
Nick Preston, Fund Manager of Tritax EuroBox, commented: “We are delighted to announce the twelfth investment for Tritax Eurobox plc, bringing the total amount invested to over €784.1m and the Company’s LTV to 43%, close to the target level of 45%. The off-market acquisition of these newly developed, high specification assets situated in a prime logistics location at Strykow in Poland, is at an attractive and accretive yield. We are confident of delivering the identified asset management plan that is expected to provide further value from these assets, capitalising on this established logistics location with strengthening supply/demand fundamentals, excellent transport links and a robust labour market. Together, this will further support the Company’s delivery of secure long-term income to shareholders and an attractive total return.”