(Alliance News) - Tritax Big Box REIT PLC on Monday said it has obtained planning consent and exchanged contracts to pre-let its new Mega Box logistics building in Littlebrook, Dartford.
The development, consisting of a 2.3 million square foot logistics building on 35.5 acres near London's M25 orbital motorway, has been pre-let to an undisclosed "world leading on-line retailer" who is already a tenant of other Big Box assets.
This pre-let, along with the planning consent, make up phase 2 and part of phase 3 of the development. Dartford Borough Council granted the consent, which is subject to expiry of a six-week judicial review period and the meeting of some conditions.
Located on the former site of a decommissioned power station, the Littlebrook development project "has the potential to become one of London's largest Big Box logistics parks in a critical 'last journey' location inside the M25". Practical completion of the project is due in summer 2021.
The new 20-year lease is subject to annual upward-only rent reviews indexed to the UK consumer price index and the first review is scheduled for summer 2022. Triax Big Box will benefit from a licence fee from the developer, Bericote Properties, during the construction period equivalent to annual rent payable.
Total development cost for delivery of the project is forecast at GBP205 million. This has been committed to using current credit facilities plus and has another GBP164 million of costs to completion.
Chief Executive Colin Godfrey said: "The signing of this pre-let for a 2.3 million [square foot] prime logistics facility is a great achievement and demonstrates our strategy is working. By combining our deep understanding of the market and long-standing customer relationships forged across existing high-quality assets with an attractive development portfolio, we are creating significant value for our customers and investors. Furthermore, recent macro events are accelerating substantial tailwinds for our business through the ongoing adoption of e-commerce platforms as consumers increasingly shop online.
"This enhances our existing portfolio with a substantial, prime and sustainable logistics investment at an attractive yield on cost as we advance our plans to transform this disused brownfield site into a new premium logistics park. Working with our partner Bericote, the development of the site will not only deliver much sought-after high specification logistics space for London, but will also bring enhanced local infrastructure and significant employment opportunities to the local area, strengthening its economic growth."
Shares in Tritax Big Box were down 2.4% at 135.70 pence in London on Monday morning.
By Anna Farley; annafarley@alliancenews.com
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Tritax Big Box (BBOX)