Tritax confirms funding for new Screwfix centre

8th Dec 2016 08:12

(ShareCast News) - Tritax Big Box REIT announced on Thursday that it has completed the land purchase and exchanged contracts to provide forward funding for the development of a new distribution facility at Prologis Park Fradley, Staffordshire, pre-let to Screwfix Direct, a division of Kingfisher.The FTSE 250 company said Screwfix is the UK's largest multi-channel retailer of trade tools, accessories and hardware products, with the development representing an investment of £52.7m, reflecting a net initial yield of 5.5% net of acquisition costs.It said the site is situated in a "key Midlands logistics location", adjacent to the A38 dual carriageway, providing connectivity to the M6 Toll, M42 and M1 motorways and with close proximity to rail and air connections.The area has reportedly attracted a significant number of major occupiers including Bidvest Foodservice, DHL, Tesco, Wincanton and Yodel.Tritax's new facility will be completed to a high specification, comprising 562,000 sq ft with an eaves height of 15 metres, parking, offices and a site cover of approximately 48%.The development will be Screwfix's fourth UK distribution centre.Upon practical completion of the construction, targeted for October 2017, the property will be leased to Screwfix on a new 10 year lease, subject to five yearly upward-only open market rent reviews.During the construction phase, Tritax said it will receive an income return equivalent to the agreed rent from the developer.The development is being undertaken by Winvic Construction and guaranteed by Prologis UK on behalf of Tango Real Estate, a joint venture vehicle between Prologis and Wittington Investments.Tritax said it has funded the land purchase using equity proceeds, with senior debt finance to be introduced in the near term."This investment which is accretive to our dividend is a good addition to our portfolio, offering tenant and business sector diversification with a strong covenant," said Tritax partner Colin Godfrey."The property is located within the Golden Triangle for UK logistics, which is seeing positive rental growth."This represents our eighth pre-let forward funded development and brings our total portfolio to 35 assets."