(Alliance News) - Tritax Big Box REIT PLC said Thursday it has sold its Chesterfield single-let warehouse assets to Warehouse REIT PLC for GBP57.3 million.
FTSE 250-listed Tritax acquired the asset in March 2014 when it had 6.2 years of lease remaining to supermarket Tesco PLC. In 2018, it 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.com Inc. Tritax said this "significantly enhanced the value of the asset".
Amazon UK still has a 13-year lease at the 500,000 square foot warehouse, located just off the M1 motorway. The lease holds five-yearly upward only rent reviews with no breaks.
The price is a premium to the June 30 book value, Tritax said, and reflects an internal rate of return of 18.5% per annum.
Warehouse REIT noted - when combined with the other Amazon-occupied properties in Warehouse REIT's portfolio, at just over GBP4 million rent per annum as a result of this acquisition - the e-commerce giant is now the largest tenant on the company's rent roll.
Tritax Chief Executive Colin Godfrey said: "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."
Warehouse REIT also noted it has acquired a further logistics warehouse in Cheshire for GBP25 million, which is occupied by London-listed third party logistics operator Wincanton PLC.
The warehouse has 3.5 years remaining on its lease off a low passing rent of about GBP5 per square foot which, Warehouse REIT said, compares "favourably" to lettings that the company has recently achieved on its wider estate.
"New-build development activity locally reinforces the strength of the Midpoint Estate's distribution location, which sits within two miles of Junction 18 of the M6 motorway and approximately 26 miles south of Manchester," Warehouse REIT added.
"We look forward to integrating these assets into the wider portfolio, while we continue to work through our pipeline of identified opportunities for the REIT to deploy the remaining proceeds from the recent equity raise ahead of schedule and allow the targeted scale to be achieved, whilst driving shareholder returns," said Andrew Bird, managing director of Warehouse REIT's investment advisor, Tilstone Partners.
Shares in Tritax Big Box REIT were up 1.2% in London on Thursday morning at 156.40 pence each, while Warehouse REIT was 0.3% lower at 114.18p.
By Paul McGowan; paulmcgowan@alliancenews.com
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Tritax Big Box (BBOX)
Warehouse Reit (WHR)