Tritax Big Box sells Chesterfield asset to Warehouse REIT

Tritax Big Box announced the sale of its Chesterfield asset on Thursday, for £57.3m.

The FTSE 250 real estate investment trust acquired it in March 2014, when it had 6.2 years of lease remaining to Tesco.

In 2018, it 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 its ongoing portfolio evaluation, Tritax said it decided to realise the value created on this asset via a sale to Warehouse REIT.

The price was a premium to the 30 June book value, and reflected an internal rate of return of 18.5% per annum.

Tritax’s board said the asset sale demonstrated its ability to create and realise value in its portfolio by direct and active asset management, while the proceeds from the disposal would be redeployed into attractive opportunities, including our development pipeline with a target yield on cost of between 6% and 8%.

“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,” said chief executive officer Colin Godfrey.

“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.”

Godfrey said there is “strong” investment demand in the market for high-calibre logistics assets of this nature, which the company is able to take advantage of through “carefully selected” disposals, redeploying the proceeds into opportunities including its development pipeline, where the firm expects 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.”

At 0923 BST, shares in Tritax Big Box REIT were up 0.95% at 156.27p.