DTZ Investors acquires €160m Tesco Irish distribution facility

DTZ Investors has acquired Tesco’s Irish Distribution Centre in Dublin, Ireland, on behalf of KTB Investment & Securities and KTB Asset Management (“KTB”), in the largest ever single-asset logistics transaction in Ireland.

KTB and DTZ Investors were advised on the off-market deal by Cushman & Wakefield’s Capital Markets and Debt & Structured Finance teams.

The 788,000 sq ft warehouse is a purpose-built facility and benefits from a lease guaranteed by Tesco PLC until 2032 and annual upwards only indexation in line with CPI. Tesco is one of the world’s largest retail and grocery brands and continues to expand in Ireland. The distribution centre is essential to its operations providing dry-goods distribution to the entire Tesco portfolio of stores across Ireland.

David Peacock of DTZ Investors: “This off-market acquisition is an exceptional example of identifying a suitable investment opportunity that meets our client’s investment objectives and executing successfully on what is the largest single-asset logistics transaction in Ireland. The income profile, in terms of length and escalation, and strength of the Tesco PLC credit provides for very attractive income investment characteristics. The transaction profile is further enhanced when considered against the backdrop of the very restricted supply of logistics assets of scale in Ireland and the building’s importance to Tesco’s Irish operations.”

Jonghan Kim of Cushman & Wakefield: “It was a great pleasure working with KTB and DTZ Investors on this off-market transaction. It is another example of Cushman & Wakefield’s Capital Markets teams sourcing long lease off-market assets in Europe on behalf of Korean capital.”

The transaction is DTZ Investors’ third acquisition in 2019 on behalf of South Korean clients, following the successful acquisitions of Main Point Pankràc, Prague (€130million) and Queens Towers, Amsterdam (€130million) earlier this year.

The purchaser was also advised by Ashurst LLP, Walkers Global and KPMG.