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Tritax Big Box announced on Thursday that it has acquired a regional distribution centre at Riversdale Road in Atherstone, currently let to Royal Mail.
The FTSE 250 real estate investment trust said the total consideration was £32.68m, excluding purchaser's costs, reflecting a net initial yield of 6.1% on the corporate acquisition.
It confirmed the purchase was being funded from equity.
“We are delighted to have acquired the Royal Mail's regional distribution centre for the Midlands at an attractive yield which is accretive to our portfolio income yield and which offers the potential for strong rental growth in 2021 as well as opportunities for future value enhancement,” said Tritax partner Colin Godfrey.
“The facility, which is situated in an established core logistics location, has already recently benefited from significant capital expenditure with further investment committed to by the tenant.”
Tritax said the facility provided a “centrally located and adaptable” regional distribution centre in the Midlands.
It said the building had recently benefited from “significant” capital investment, with further capital investment committed to by the tenant for its occupation.
The cross-docked property has a gross internal area of 381,091 square feet, an eaves height of between 9 and 10 metres, 360-degree circulation and an “extensive” service yard area, providing a low site cover of around 35%.
Tritax said the investment had been acquired with an unexpired lease term of approximately 10 years, subject to upward-only five-yearly open market rent reviews.
The next rent review was due in September 2021.
Located in Atherstone, 21 miles north-east of Birmingham, the board said the facility is situated within the so-called 'golden triangle' of logistics.
The property has good road, airport and rail connectivity, with accessibility via the A5 to the M42, M69, M6, M1 motorways, close proximity to Birmingham International and East Midlands airports and direct rail links to London.
As an established core logistics location, Tritax said it had attracted a “significant number” of major occupiers, including Aldi, Jaguar Land Rover and TNT.
The company's two distribution facilities in Birch Coppice, five miles away, were let to Euro Car Parts and Morrisons.
“The Royal Mail provides an additional strong and established covenant and we are delighted to add Royal Mail to the high calibre list of tenants already represented in our portfolio,” Colin Godfrey added.