Tritax Big Box buys Birmingham distribution facility run by Ocado

Tritax Big Box has bought a distribution facility at Birch Coppice business park in Birmingham which is operated by Ocado and serves both Ocado's and Wm Morrison's online retail businesses, for £92.3m.

The purchase, the price of which reflects a net initial yield of 5.25% on the asset acquisition, is being funded from equity and Morrisons will act as guarantor. The investment has been acquired with an unexpired lease term of around 21 years, with no tenant break, subject to annual upward only rent reviews indexed to the consumer price index and capped at 3.5%.

Tritax said 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 good airport and motorway connectivity with close proximity to the M6, M1, M69 and M6 as well as Birmingham International and East Midlands airports.

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.

Tritax partner Colin Godfrey said: "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."

At 0933 BST, the shares were down 0.9% to 145.10p.