Following the recent acquisition of New Look’s Newcastle-under-Lyme distribution centre, Tritax Big Box has added another major asset to its growing portfolio.
Today, the real estate investment trust (REIT) has announced that it has exchanged contracts on the Tesco Regional Distribution Centre at Capital Park, Goole for a purchase price of £47.1 million. The deal, which is expected to be completed within the next few days, reflects a net initial yield of 5.67 per cent.
The facility was developed for Tesco in 2007 and serves as one of its principle regional hubs for the distribution of general merchandise, ambient food and beverages. It currently provides an internal floor area of 702,000 sq ft, but the low site density offers the potential to add a further 150,000 sq ft of space.
The asset has been acquired with an unexpired lease term of 17.5 years, which is subject to five yearly upward only market rent reviews. The next review is due in 2.5 years.
Colin Godfrey, Partner of Tritax, said that the location of the facility provides excellent road and rail connectivity, and its proximity to the East Coast ports is ideal for goods inwards.
“The area also benefits from an undersupply of Big Box distribution assets available to let and, when coupled with the high and increasing demand from prospective occupiers, is already producing attractive rental growth,” he continued.
“To date, the Company has made 21 Big Box investments with a portfolio weighted average unexpired lease term of over 15 years, and this latest purchase helps further support our target to achieve an annual dividend of 6 pence per share for 2015.”
Capital Park is located close to both Goole town centre and the Port of Goole’s dedicated rail freight terminal. The site has the future potential to be connected to the national rail network.
SG Commercial represented Tritax Big Box REIT and Knight Frank LLP represented the vendor.
