(Alliance News) - Tritax EuroBox PLC on Friday said it sold a redevelopment site in Malmo, Sweden to an unnamed data centre owner-occupier for SEK320 million, about GBP24 million.
The investor in Continental European logistics real estate said the net sale price was 39% above the property's valuation at March 31 and 14% above its acquisition price, net of costs.
Tritax EuroBox had bought the property in 2021 for SEK223 million with the intention of redeveloping it for a logistics scheme of around 60,700 square metres. It was bought from Scandinavian food processing firm, Atria Group.
However, the company said that given the "weaker market fundamentals and increased construction costs", expected returns from the development were not "as compelling as selling the site for an alternative use".
Tritax Eurobox said proceeds from the sale will be mainly used to pay down its debt.
Investment Director Alina Iorgulescu said: "The sale of Malmo is the third asset sold as part of the disposal programme outlined in our interim results. The sale reflects our conclusion that potential returns from the necessary capital investment for the redevelopment of the site were less attractive than disposing of the site for an alternative use and realises profits sooner than anticipated. The transaction is aligned with our strategy of recycling capital to reduce leverage and provides further evidence of Tritax EuroBox's disciplined approach to capital allocation."
Shares in Tritax EuroBox were up 1.3% at 55.90 pence each in London on Friday morning.
By Sabrina Penty, Alliance News reporter
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Tritax Eurobox (EBOX)