IKEA is officially moving to Dartford after it was revealed they are behind a deal to secure a 450,000 sq ft ‘powerhouse’, but the unit will sadly not be a customer-facing store. The Swedish giants have confirmed they have signed a 15-year lease with developers on a pre-let agreement for
Tritax Big Box REIT plc (Tritax Big Box or the Company) today announces it has acquired an 872,000 sq ft distribution unit in Avonmouth for £90 million, reflecting an attractive net initial yield of 5.1% for c.13 year income. Large scale and attractively priced state of the art asset in
BDC 319 : Aug 2024
IKEA is officially moving to Dartford after it was revealed they are behind a deal to secure a 450,000 sq ft ‘powerhouse’, but the unit will sadly not be a customer-facing store. The Swedish giants have confirmed they have signed a 15-year lease with developers on a pre-let agreement for the massive warehouse, located at the former Littlebrook Power Station site on the south bank of the River Thames. They will be joining Amazon at the site after they recently moved into a 2.3 million sq ft ‘Mega Box’ distribution centre right next door, with the entire park undergoing fierce redevelopment to become a “critical last journey location inside the M25.” However, IKEA will not be opening a new store for customers as part of the plans, instead developing a massive new distribution centre which will “meet our customers wherever and whenever they need us.” The distribution centre in Dartford is set to serve IKEA’s stores across the UK and south east – including Greenwich, Croydon and Lakeside. A spokesperson for IKEA said they were “delighted to confirm” they would be moving into a unit at The Power House project in Dartford. “This exciting investment forms part of our ongoing transformation to become even more affordable, accessible and sustainable, accelerating our omnichannel approach to meet our customers wherever and whenever they need us, irrespective of where they live or whether they visit us in-store or online.” The ‘450@thepowerhouse’ unit is currently under construction, and it is not yet know when the site will be opening or how many jobs will be created. Adjacent to the IKEA site, Amazon have just moved into their own distribution centre at the old Littlebrook power station site, a vast £200 million build on a 45-acre plot of land. The move is part of an expansion for the retail titans, with around 1,3000 new jobs created locally in a welcome boost for the area. Workers are even being offered a £1,000 starting bonus amid worker struggles. With IKEA and Amazon m the former Littlebrook power station next to the Dartford-Thurrock River Crossing, The impressive unit in Dartford has been pre-let to IKEA by Bericote and Titrax Big Box who are leading the major regeneration of the area located adjacent to the QE2 Bridge and Dartford Tunnel on the south bank of the Thames. Titrax Big Box say the location will mean it’s project, a “rare asset so close to the heart of London,” will benefit from “exceptional transport connectivity via motorway, rail and water, excellent infrastructure, significant power provision and a robust labour market.” Jonathan Maher, development director at Bericote, said: “This letting underpins Bericote’s ongoing commitment to creating highly specified, modern and adaptable industrial and logistics solutions in strategic locations across the UK. “The pre-letting during construction of this speculative development underlines the strength of the market and the very attractive attributes of the site and we look forward to repeating the same success for the next phase of the development.” Charlie Withers, director of development for Tritax Management, added: “Securing a 15-year letting at thepowerhouse to another high quality occupier, further validates our strategic focus on development. “The new tenant, will join Amazon at what is becoming the preeminent logistics location in the UK’s South East.” Plans were submitted in June for the third phase of the project, and developers of the park also say they have allocated 30% of the overall Littlebrook site for permanent open space and habitat creation for wildlife. IKEA added: “As we continue to step up our sustainability commitments, guided by our established strategy to become People & Planet Positive by 2030, we were also attracted by the site’s significant biodiversity enhancement and habitat creation plans, which have informed the UK Green Building Council’s Nature Based Solutions best practice guidance for the industry.”
Tritax Big Box REIT plc (Tritax Big Box or the Company) today announces it has acquired an 872,000 sq ft distribution unit in Avonmouth for £90 million, reflecting an attractive net initial yield of 5.1% for c.13 year income. Large scale and attractively priced state of the art asset in a strengthening logistics location Secured through an off-market acquisition, the asset expands the Company’s exposure to the increasingly important South West of England: Avonmouth is the principal logistics and manufacturing area for the South West, centred around the Port of Bristol. Following approval for a deep-sea container terminal at Avonmouth, the capacity of the docks is expected to double over the next 10 years. The area has low vacancy rates due to rising occupier demand driven by excellent transport links with the M5, M4 and M49 motorways enabling access to over 85% of the UK’s population within 4.5 hours and further supported by strong and rising demand from the port. Demand has continued to outpace supply in the region, encouraging and sustaining rental growth. Providing critical space to a world-leading customer The building is let to Accolade Wines Limited (the Customer), one of the world’s largest wine companies by volume and the leading producer and distributor of wine in the United Kingdom and Australia. The building is a key component of the Customer’s supply chain used for receiving then bottling wine for sale into the key UK and European markets. Constructed in 2008, with a ground floor area of 872,000 sq ft, the building has internal eaves heights of between 15 and 18 metres, 30 dock level loading doors and high-quality office accommodation. The Customer has installed state of the art bottling and box bag packaging lines and tanks, with the capacity to produce 1,200 bottles of wine every minute from this multi-award winning bottling facility. The building is the largest wine production, warehouse and distribution centre in Europe, distributing to all major UK supermarkets and European markets and providing approximately 20% of the UK’s wine supply. Delivering long-term income and value growth The asset offers 12.8 years of unexpired lease term in an attractive reversionary position, with five-yearly rent reviews providing a minimum of CPI uplifts, opportunities to add further value through a potential lease extension, and ESG related asset management initiatives aligned to the Customer’s commitment to Net Zero Carbon. Colin Godfrey, CEO, Fund Management at Tritax, commented: “In line with our strategy, we continue to monitor the market closely for attractive acquisition opportunities. This is a key asset, let to one of the world’s largest wine companies by volume, in a strong and increasingly important location for logistics in the UK. “This state-of-the-art asset, acquired off-market, provides a valuable and long-term income stream. The tenant has committed heavily to this award-winning facility, which is the largest wine warehouse and distribution centre in Europe. Thanks to a combination of buying well, strong market fundamentals and opportunities for value enhancing asset management initiatives, we believe this building will deliver a very attractive return to our shareholders.”
