Tritax Big Box REIT plc has announced it has acquired a prime temperature controlled distribution unit in the core South Coast location within the Nursling Industrial Estate in Southampton, for £44.2 million, reflecting a net initial yield of 5.24%, in an off market transaction with a UK real estate fund.
The acquisition secures an attractive asset in a prime logistics location, providing critical cold-store capabilities close to a key UK port.
- 325,000 sq ft building with extensive cold-store capabilities on a 20 acre site
- Well configured cross-docked building with 10 metre eaves and 53 dock levellers, together with extensive parking and yard area
- Nursling Industrial Estate is the pre-eminent location for logistics on the South Coast, where Southampton represents the primary logistics hub for the region
- Very low vacancy rates in the Southampton area due to high demand from a range of occupiers
The building is let to Tesco on a 25 year lease expiring in January 2021 and, through extensive due diligence, we believe the site provides a range of opportunities to deliver near-term value through asset management, including:
- Increasing value through agreeing a lease regear/new lease
- Growing income through capturing current market rental reversion
- Capturing future rental growth in a structurally undersupplied location
- Enhancing the configuration of the built area and yard
- Increasing the asset’s sustainability through green initiatives such as solar
Colin Godfrey, CEO, Fund Management, commented:
“This is a rare asset acquired off-market in a prime South Coast location next to the M27 motorway and close to the Port of Southampton. Benefitting from a strong existing tenant and a robust underlying occupational market, this building presents us with several attractive asset management opportunities which we expect will drive income and capital value growth. While the investment market for logistics assets continues to strengthen, there remain select attractive acquisition opportunities where significant value can be added through asset management.”
