Tritax Big Box REIT plc (Tritax Big Box or the Company) today announces completion on the sale of its Chesterfield asset for £57.3 million. We acquired the asset in March 2014 when it had 6.2 years of lease remaining to Tesco. In 2018, we implemented a pro-active asset management initiative and agreed
More than 10 million sq ft of warehouse space was under offer at the beginning of 2020 – a 233% increase since end of 2018, according to CBRE. In its latest trading update investor developer Tritax Symmetry chief executive, fund management, Colin Godfrey, said such figures looked promising for developers
BDC 319 : Aug 2024
Tritax Big Box REIT plc (Tritax Big Box or the Company) today announces completion on the sale of its Chesterfield asset for £57.3 million. We acquired the asset in March 2014 when it had 6.2 years of lease remaining to Tesco. In 2018, we implemented a pro-active asset management initiative and agreed an early surrender of the existing lease to Tesco and secured a new 15-year lease to Amazon, significantly enhancing the value of the asset. Having completed all key asset management initiatives, and as part of our ongoing portfolio evaluation, we decided to realise the value created on this asset via a sale to Warehouse REIT. The price is a premium to the 30 June 2020 book value and reflects an IRR of 18.5% per annum. This asset sale demonstrates our ability to create and realise value in our portfolio by direct and active asset management while the proceeds from the disposal will be redeployed into attractive opportunities, including our development pipeline with a target yield on cost of 6-8%. Colin Godfrey, CEO, Fund Management, commented:“The sale of our Chesterfield asset for £57.3 million demonstrates the successful implementation of our strategy and is a great result for our shareholders. Through our active management, and working closely with our customers, we were able to support them while significantly enhancing the value of the Chesterfield asset, securing a high-quality tenant on attractive lease terms. There is strong investment demand in the market for high-calibre logistics assets of this nature, which we are able to take advantage of through carefully selected disposals, redeploying the proceeds into attractive opportunities including our development pipeline where we expect to deliver a 6% to 8% yield on cost. “With investment demand in the market remaining strong, and attractive opportunities for us to deploy capital, we expect to complete a number of further disposals during the remainder of this financial year”
More than 10 million sq ft of warehouse space was under offer at the beginning of 2020 – a 233% increase since end of 2018, according to CBRE. In its latest trading update investor developer Tritax Symmetry chief executive, fund management, Colin Godfrey, said such figures looked promising for developers and investors in the logistics property sector. “Occupier take-up looks promising for 2020 with over 10 million sq ft of lettings reported to be under offer and carried over from 2019,” said Godfrey. “Speculative supply has slightly decreased from 2018, but importantly reduced by circa 50% for buildings over 500,000 sq ft, where demand continues to outstrip supply. Attractive levels of rental growth are therefore expected to continue. “The market for very large Big Box logistics assets continues to display strong fundamentals for 2020 and the longer term. Structural tailwinds are supportive as occupiers upscale the size of their logistics assets to further increase efficiency, reduce costs and rationalise their supply chains, in the face of the rapid transition to omni-channel purchasing by consumers.” Big box availability decreases However, according to CBRE, the UK’s Big Box logistics availability slightly decreased through 2019 to just over 27 million sq ft. Take up in 2019 topped 25 million sq ft means that on last years’ take up figures there is approximately just over one years’ supply going forward. There were 92 deals were signed throughout 2019. Of that 43.4% of the space taken related to units between 100,000 and 300,000 sq ft, resulting in an average deal size of 275,858 sq ft. 3PLs providers took the most space during 2019 (accounting for 22.7% of take- up), with online retailers on second position (22.1%) and the motor industry completing the podium (18.3%). Spec shed development increases Meanwhile, over the course of 2019, available supply – including speculative space under construction – rose by 15% according to the latest research from JLL. Jon Sleeman, director of UK research at JLL, said: “We saw more speculative starts take place in 2019 and at the end of the year there was 5.1 million sq ft speculatively under construction. We expect to see further speculative development take place this year but overall, against a backdrop of good levels of demand in the market, we are not anticipating an increase in our national vacancy rate this year.” Quiet Q4 for warehouse property market Finally Gerald Eve’s latest Prime Logistics report states that the last quarter of the year was hit by ‘economic and political uncertainty in the UK’. Take up was 24% lower than Q3, with 10.5 million sq ft taken-up in Q4, the overall volume was 11% below the 5-year quarterly average but in line with the 10-year average. Overall take-up during 2019 totalled 47 million sq ft, which was 7% down on 2018, but comfortably above the 10-year annual average.
