LONDON (Alliance News) - Tritax Big Box REIT PLC on Tuesday said it has purchased a national distribution centre in Newark, Nottinghamshire for GBP77.3 million, with the building currently let to DSG Retail Ltd, part of the electrical retailer Dixons Carphone PLC group.
Tritax said the purchase price reflects a net initial yield of 5.86% on the acquisition, with the GBP77.3 million being funded from equity proceeds and senior debt finance expected to be introduced in the near term. Completion of the acquisition is expected to take place later today, Tritax said.
Tritax said the property is one of two national DSG distribution centres located on the Newlink Business Park in Newark, Nottinghamshire, with the site forming part of DSG's principal national distribution hub for direct store replenishment, home deliveries and returns.
The facility was purpose built to a high specification for DSG in 2003 and includes an eaves height of 12.3 metres, extensive parking and a substantial service yard, Tritax said.
The facility has a gross internal floor area of 725,798 square feet, with an unexpired lease term of approximately 20 years, the company added, noting that it also benefits from 3.0% per annum fixed rental increases received every five years.
"This national distribution centre at Newark is a strong addition to the foundation income within our overall portfolio of 28 big box logistics assets and has been acquired at a level which is accretive to our portfolio's current average net initial yield," said Tritax Partner Colin Godfrey.
"It further diversifies our tenant and geographic mix and maintains the weighted average unexpired lease term across the portfolio at approximately 16.5 years. Dixons Carphone is one of the largest pure electrical retailers with a growing online presence and we are pleased to have been able to secure this key asset," Godfrey added.
Shares in Tritax were down 0.9% at 136.40 pence on Tuesday morning.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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