The Board of Tritax Big Box REIT plc (ticker: BBOX) is pleased to announce that the Company has exchanged contracts for the forward funded development of a new logistics fulfilment centre at Link 66, Darlington, pre-let to a financially robust world leading retailer. Completion is expected in early July 2018 when the land will be acquired and the development will commence. The price represents a maximum commitment of c.£120.7 million, reflecting a net initial yield of 5.0% (net of acquisition costs to the Company).
The development will comprise a cross-docked facility with 360-degree circulation, an eaves height of 18 metres and low site cover of approximately 32%. The new prime facility will be constructed to a high specification with a gross internal floor area of c.1,508,367 sq ft. The ground floor will extend to c.542,060 sq ft surmounted by two structural mezzanine floors. The property will benefit from significant capital investment by the occupier, including high levels of automation. The site forms part of Link 66, an emerging logistics location situated on the eastern edge of Darlington at the junction of the A66 and A1150, with excellent motorway connectivity via junctions 57 and 58 of the A1(M). The planned Darlington northern bypass will link the A1(M) at junction 59 to the A66 roundabout adjacent to the subject site. The location also benefits from close proximity to the cargo ports at Tees and Hartlepool, access by air via Durham Tees Valley Airport and by rail from Darlington railway station. Upon practical completion of the construction, targeted for summer 2019, the property will be leased on a new 20-year lease, subject to five yearly upward only rent reviews indexed to the Consumer Prices Index (collared at 1% pa and capped at 3% pa). The first rent review is due in summer 2024. From completion of the land purchase and during the construction phase, the Company will receive an income return equivalent to the agreed rent from the developer, thereby providing 21 years of projected income. The development is being undertaken by db symmetry, a highly experienced developer of UK industrial logistics property. DTRE represented the Company and CBRE represented the vendor Colin Godfrey, Partner of Tritax, commented: "We worked very closely with both the occupier and db symmetry in the delivery of this off-market pre-let development. Once operational the facility will be one of the most technologically advanced buildings of its kind in the UK. The investment diversifies the Company's portfolio by geography and provides further exposure to a high calibre tenant on a long lease."