Tritax Big Box REIT has paid £78.5m for two logistics units at Prologis Park in Staffordshire.
The units, both near Stoke-on-Trent and bought from Prologis European Finance XI Sarl, are let to Marks & Spencer and Dunelm, the homewares retailer.
Built to a high specification in 2008, the M&S deal represents a net initial yield of 5.43%. The 382,594 sq ft facility has been acquired with an unexpired lease term of 8.5 years and has a break or rent review in 3.5.
The £5.24 / sq ft rent is subject to five yearly upward only open market rent reviews.
The Dunelm facility comprises two interconnected buildings with a gross internal floor area of 503,389 sq ft. The deal reflected a net initial yield of 5.38%both with an unexpired lease term of around three years. There are no further rent reviews with the current level set at £4.56/sq ft.
Colin Godfrey, partner of Tritax, said: “We are very pleased to have acquired these modern and adjacent Big Box distribution facilities, situated in an established core logistics location with two high quality tenant covenants in M&S and Dunelm. They build on our strong working relationship with both retailers.
“These value add investments provide opportunity for rental growth and the short unexpired lease terms offer potential for capital value enhancement from either lease renewal or reletting.
“Value add assets now constitute 17% of our portfolio by value.”
DTRE sold the assets on behalf of Prologis. Tritax was unrepresented.