Euro Tritax box has conditionally agreed to the acquisition of a €144.26 million (£121.12 million) prime logistics asset in Roosendaal, the Netherlands, from one of its development partners and asset management Logistics Capital Partners (LCP).
The FTSE 250 logistics-focused property investor said the asset was pre-let to one of the world’s ‘top four’ discount supermarket groups.
When complete, the asset would comprise a single property divided into three units, built in three phases.
It would have a total net leasable area of approximately 113,179 square metres, built on a total site area of 210,488 square metres.
Tritax said the transaction was structured as a term finance development opportunity, where the company purchased the land and financed construction of the building under a fixed-price contract.
He said the total cost of the land and development expenses would be 144.26 million euros, reflecting a net initial return of 3.5% after purchase costs and sunk expenses.
The three units were already pre-let to the unnamed supermarket group on a single lease, expiring in November 2027.
The lease would generate €5.1 million per year at the end of the three phases and would initially be indexed annually to the Dutch consumer price index.
Tritax said the lease would include a rent review and an option to extend for another five years, at the end of the sixth year of the lease term.
This review would allow the rent to increase to the prevailing free market level, with a cap of 10% above the indexed rent existing at that time.
LCP completed construction of the first phase in December, with the second and third phases expected to be completed on December 1, 2022 and April 1, 2023 respectively.
Under the proposal, during the construction phase, LCP would pay the company an income equivalent to the projected rent, until practical completion.
“We are delighted to announce a new rollout at a leading European logistics site, following the Swedish acquisition announced on January 17,” said Alina Iorgulescu, Deputy Fund Manager of Tritax EuroBox.
“Today’s acquisition delivers on our commitment to acquire premium assets in prime locations across Europe, all built to high ESG standards and home to leading international occupants, while strengthening our relationship with our partner Logistics Capital Partners.”
Iorgulescu said that by negotiating a review of market rents as part of the lease, the company had the opportunity to capture the “strong” rental growth seen in the Netherlands, as well as in other European markets, where demand for modern logistics assets exceeded supply.
“We expect this rental growth to continue over the current lease term of the asset, while creating strong potential for income and capital growth and sustainable shareholder value.”
At 08:34 GMT, the Tritax EuroBox share rose 1.65% in London, to €1.23.