29th Sep 2014 16:31
LONDON (Alliance News) - Tritax Big Box REIT PLC Monday said it has agreed to provide forward funding for the development of a new logistics facility near Bognor Regis, West Sussex, pre-let in its entirety to Rolls-Royce Motor Cars Ltd.
The investment price is GBP37 million, reflecting a yield of 6.25%.
Tritax said the 18.95 acre site will house a new technology and logistics centre for Rolls-Royce Motor Cars. The new centre will be used as a warehouse and distribution centre for inbound production parts, a car body store and finished car store with workshop for car preparation.
Contracts have been exchanged to let the development, once completed, to Rolls Royce MC on two new leases for terms of 10 years, with a fixed rental uplift at the start of year five equivalent to 3% pa compound. During the construction phase, the company will receive an income return from the developer.
Tritax, however, is not developing the site or assuming development risk. The development is being undertaken by Bericote Group.
Construction of the main works is expected to commence in November with practical completion targeted for the spring of 2016.
Tritax said the purchase will be funded by the company out of equity proceeds, with senior debt finance expected to be introduced in the near term.
Tritax Big Box shares closed up 0.2% at 108.00 pence Monday afternoon.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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