Tritax Big Box is pleased to announce that it has acquired a distribution facility at Birch Coppice Business Park, Dordon, Birmingham operated by Ocado Limited and serving both Ocado’s and Wm Morrison Supermarkets Plc’s online retail businesses. The total consideration is €105m (£92.33m), reflecting a net initial yield of 5.25% on the asset acquisition. The purchase is being funded from equity, and Morrisons will act as guarantor.
The facility was purpose-built to a high specification in 2012 for Ocado and comprises one of its four principal temperature controlled Customer Fulfilment centres. The building has a gross internal area, including the mezzanine floors, of over 700,000 ft², an eaves height of 16m and a low site cover of c. 23%. The building has benefited from significant capital investment incorporating a high level of automation. The investment has been acquired with an unexpired lease term of approximately 21 years (with no tenant break), subject to annual upward only rent reviews indexed to the Consumer Price Index and capped at 3.5%.
Located in Birch Coppice Business Park, Birmingham, the facility is within the ‘Golden Triangle’ of logistics and is one of the UK’s premier rail connected distribution parks, with direct access to the Birmingham Intermodal Freight Terminal, one of the UK’s most efficient rail freight terminals. The property also has excellent airport and motorway connectivity with close proximity to the M6, M1, M69 and M6 as well as Birmingham International and East Midlands airports. As an established core logistics location, it has attracted a significant number of major occupiers, including Bunzl, HiB, Volkswagen Group and UPS, in addition to the Company’s distribution facility let to Euro Car Parts.
Colin Godfrey, Partner of Tritax, commented: “The acquisition of this Morrisons’ distribution facility, operated by Ocado, builds upon our strong working relationship with both retailers. The property will provide long term income in one of the most sought after locations within the ‘Golden Triangle’ providing access to 85% of the UK within 4.5 hours."
