Tritax Big Box exchanges contracts on Wolverhampton warehouse

Tritax Big Box announced on Tuesday that it has exchanged contracts to provide forward funding for the development of a new logistics facility and headquarters at Four Ashes, Wolverhampton.

The FTSE 250 firm said the investment price is £56.3m, reflecting a net initial yield of 5.14% net of land acquisition costs.

It said the site is strategically located in the West Midlands, close to junction 12 of the M6, providing good access to Birmingham and Nottingham.

The new facility will comprise a gross internal area of 543,692 sq ft. with expansion land to accommodate up to a further 101,139 sq ft, it said, and will include modern specifications, with a clear height of 15 and 12 metres and a low site cover of approximately 43%.

“Agreement has been reached with a leading global designer and manufacturer of components and assemblies to enter into a new 25-year lease for the new facility, conditional upon detailed planning consent,” Tritax’s board said in a statement.

“The lease will be subject to five yearly upward only rent reviews indexed to the Retail Price Index, providing a minimum 2% pa rental growth, capped at 4% pa.

“During the construction phase, the company will receive an income return equivalent to the agreed rent from the developer,” the board added.

The development is being undertaken by Bericote Properties, with construction of the main works expected to commence during September and practical completion anticipated for July 2017.

Tritax said the land purchase is expected to be funded by the company from equity proceeds, with senior debt finance to be introduced in the near term.

“We are very pleased to be investing in this new logistics facility and UK headquarters which will benefit from significant capital investment by the tenant with the capacity to expand the unit to accommodate future growth plans,” said Tritax partner Colin Godfrey.

“This investment provides further tenant, geographic and business sector diversification whilst maintaining a WAULT of over 16 years.

“This is our seventh pre-let forward funded development and the third with Bericote, one of the UK's leading developers of Big Box assets, following the successful completion of the Rolls-Royce Motor Cars and Ocado facilities,” Godfrey added.