Tritax Big Box REIT plc (Tritax Big Box or the Company) today announces completion on the sale of its Chesterfield asset for £57.3 million.
We acquired the asset in March 2014 when it had 6.2 years of lease remaining to Tesco. In 2018, we implemented a pro-active asset management initiative and agreed an early surrender of the existing lease to Tesco and secured a new 15-year lease to Amazon, significantly enhancing the value of the asset.
Having completed all key asset management initiatives, and as part of our ongoing portfolio evaluation, we decided to realise the value created on this asset via a sale to Warehouse REIT. The price is a premium to the 30 June 2020 book value and reflects an IRR of 18.5% per annum.
This asset sale demonstrates our ability to create and realise value in our portfolio by direct and active asset management while the proceeds from the disposal will be redeployed into attractive opportunities, including our development pipeline with a target yield on cost of 6-8%.
Colin Godfrey, CEO, Fund Management, commented:
“The sale of our Chesterfield asset for £57.3 million demonstrates the successful implementation of our strategy and is a great result for our shareholders. Through our active management, and working closely with our customers, we were able to support them while significantly enhancing the value of the Chesterfield asset, securing a high-quality tenant on attractive lease terms. There is strong investment demand in the market for high-calibre logistics assets of this nature, which we are able to take advantage of through carefully selected disposals, redeploying the proceeds into attractive opportunities including our development pipeline where we expect to deliver a 6% to 8% yield on cost.
“With investment demand in the market remaining strong, and attractive opportunities for us to deploy capital, we expect to complete a number of further disposals during the remainder of this financial year”