The Board of Tritax Big Box REIT plc (ticker: BBOX) announced that it has exchanged contracts with a major UK institution to acquire two modern Big Box logistics facilities at Birch Coppice, Birmingham and at Warth Park, Raunds, Northamptonshire, let to Euro Car Parts and Whirlpool UK Appliances, respectively. The combined purchase price is €127m (£115.5m). Completion of the purchases are conditional (amongst other things) on the successful completion of the fundraising announced by the Company on 28 September 2016 and are expected to occur on or around 20 October 2016.
These purchases comprise two of the three assets noted as being under offer and in exclusivity in the announcement of the Issue. It is anticipated that contracts will also be exchanged on the third asset in the near term.
Euro Car Parts Main National Distribution Facility at Birch Coppice Business Park, Birmingham
The facility at Birch Coppice Business Park is let to Euro Car Parts, whose ultimate parent company is NASDAQ-listed LKQ Corporation, the largest provider of alternative automobile components in North America and the UK. The purchase price is £80.135m (excluding purchaser’s costs), reflecting a net initial yield of 5.04% on the asset acquisition. The purchase price will be funded by equity proceeds (with senior debt expected to be introduced in the near term).
Completed in January 2016 for Euro Car Parts as its new main National Distribution facility, the property has benefited from significant capital investment from the tenant. Purpose-built to a high specification, it comprises an eaves height of 18 metres, offices, a secure trailer park and extensive parking. The facility has a gross internal floor area of approximately 72,555m².
Birch Coppice Business Park, Birmingham, located within the Golden Triangle of logistics, 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, CEVA Logistics, Ocado, PHS, Volkswagen Group and UPS. The property is being acquired with an unexpired lease term of approximately 19.35 years subject to five yearly upward only rent reviews indexed to the Retail Price Index (capped and collared at 2% p.a. and 4% p.a. compound). The next rent review is due in January 2021. The passing rent is £5.48 per sq ft which could be considered reversionary against recent market transactions.
Whirlpool Distribution Facility at Warth Park, Raunds, Northamptonshire
The facility at Warth Park is let to Whirlpool whose ultimate parent is Whirlpool Corporation Group, an S&P 500 constituent and the world’s leading global manufacturer of home appliances. The purchase price is £35.35m (excluding purchaser’s costs), reflecting a net initial yield of 6.6% on the asset acquisition. The purchase price will be funded by equity proceeds (with senior debt expected to be introduced in the near term).
The facility was completed in 2001 and built to a high specification with a gross internal floor area of 473,263 sq ft and a low site cover of approximately 43%. It has benefited from significant capital investment from the tenant, including a 150,000 sq ft extension in 2006, and comprises an eaves height of 11 metres and substantial secure yards, trailer park and extensive parking.
Warth Park in Raunds, Northamptonshire is strategically located on the A45 corridor close to J13 of the A14, which provides access to the ports of Felixstowe and Harwich and also directly links to the A1(M) dual carriageway and the M1 motorway. The site is also close to the established logistics location of Northampton and Thrapston, with existing major distribution occupiers including Homebase, Morrisons and Primark and the Company’s new distribution facility pre-let to Howdens in June 2016 on a new 30 year lease, without break.
The property is being acquired with an unexpired lease term of approximately 4.3 years. There are no further rent reviews. The passing rent is c. £5.20 per sq ft with a capital value cost reflecting £75 per sq ft.
