Tritax Big Box REIT has exchanged contracts, conditional on receiving full planning consent, to provide forward funding for the development of a new National Distribution Centre at Midlands Logistics Park (MLP), Corby.
The property is pre-let to BSH Home Appliances Limited, part of the Bosch Group. The Bosch Group is the largest manufacturer of home appliances in Europe and one of the leading companies in the sector worldwide with high quality brands that include Bosch, Gaggenau, Neff and Siemens. The development represents an investment of £89.3 million, reflecting a net initial yield of 5.2% (net of acquisition costs to the Company).
The property will comprise a cross-docked facility with 360-degree circulation, a minimum eaves height of 15 metres, together with extensive parking and a site cover of approximately 50%. The new facility will be purpose-built to a high specification with a gross internal area of c.945,375 sq ft; it will become BSH’s largest UK distribution centre.
The site, situated adjacent to the pre-let Eddie Stobart Limited property owned by the Company, forms part of MLP, a new logistics park to the south of Corby.
MLP is capable of potentially accommodating approximately 5 million sq ft of logistics space and benefits from a 500-metre rail siding and yard for a potential future connection onto the rail freight network. This potential bi-modal connection for MLP would provide enhanced connectivity for the site to the UK’s ports and cities. Corby has attracted a number of major occupiers including Eddie Stobart, Wincanton, Matalan and Morrisons.
Upon practical completion of the construction, which is expected to be in Autumn 2019, the property will be let to BSH on a new 10-year lease, subject to five yearly upward only rent reviews indexed to the Retail Price Index, subject to a cap and collar. From completion of the land purchase and during the construction phase, the Company will receive an income return equivalent to the rent.
Colin Godfrey, Partner of Tritax, said: “We are very pleased to be investing in this new distribution centre for a new customer, BSH, whose home appliance products include the Bosch, Gaggenau, Neff and Siemens brands.
“This transaction also provides the Company with further exposure to an emerging well-connected East Midlands logistics park south of Corby. This off-market investment adds to our portfolio’s core foundation income and offers good potential for rental growth.”