Tritax Big Box REIT is to invest £43.43 million into the development of a Stoke-on-Trent distribution warehouse for soft furnishings retailer Dunhelm.
The real estate investment trust has completed the land purchase and entered into a forward funding agreement to deliver the 526,426 sq ft facility at Prologis Park Sideway, two miles from junctions 15 and 16 of the M6 motorway. Other major occupiers on the site include JCB, BMW, Sainsbury’s, TK Maxx, Asda, Michelin, and Marks & Spencer,
The property will be built to modern specifications with cross docking and an eaves height of 15 metres. Upon completion, which is expected in early 2016, it will be leased to Dunhelm on a ten year lease, subject to five yearly upward only rent reviews beginning after five years.
Dunhelm already occupies two smaller units at the nearby Prologis Park Stoke totalling approximately 500,000 sq ft. The combined facilities, totalling over 1 million sq ft, will serve as the company’s national distribution centre.
The development is being undertaken by Prologis UK Ltd on behalf of Tango Real Estate, a joint venture between Prologis and Wittington Investments. During the construction phase Tritax will receive an income return equivalent to rent from the developer.
Colin Godfrey, Partner of Tritax, said: “We are excited to be investing in a new best in class distribution warehose facility for Dunhelm, which is making a significant investment into the fit-out of its facility.
“We look forward to working with Prologis to deliver a strategically important new logistics hub for Dunhelm at this key logistics location, an area which has attracted many other major occupiers resulting in some of the highest levels of activity over the past year.”
The news comes a month after Tritax completed the £30 million purchase of New Look’s distribution warehouse in neighbouring Newcastle-under-Lyme, and just a week after the £47.1 million acquisition of a Tesco facility in Goole.
Along with the announcement of the Stoke-on-Trent investment, the Board of Tritax Big Box REIT has today declared an interim dividend of 1.5 pence per ordinary share for the period 1 March 2015 to 31 May 2015. Tritax will also proceed with the institutional placing of new ordinary shares at a price of 113 pence per share.
