Tritax Eurobox plc, which invests in Continental European logistics real estate assets, has acquired two recently developed prime logistics properties and development land, positioned in the core logistics location of Strykow, near Łódź in central Poland for €51.8 million (phase I) with the potential to invest a further €15.0 million developing the adjacent phase II land. The corporate acquisition reflects a net initial yield of 6.1% (net of acquisition costs to the company) and has the potential to add value through the letting of vacant units and development of the land.
The seller was Griffin Real Estate, which was acting on behalf of Redefine Properties. Last month, it was announced that Madison International Realty plans to acquire 46.5% of Redefine’s equity stake in the ELI platform (European Logistics Investment) and the sale of the Stryków centre is a pre-condition for Madison to become an equity investor in ELI.
Following the acquisition of the Castorama logistics facility in April last year, this off-market investment increases Tritax Eurobox’s presence in Strykow, which is one of Poland’s largest logistics markets and a key logistics hub in the Central and Eastern European region. Strykow is close to the A1/A2 road intersection allowing access to Poland’s main arterial roads. The location has seen rapid take up in the last five years by numerous blue-chip tenants. This asset offers scope for income growth off a low base and value enhancement through identified asset management opportunities.
The two modern buildings, completed in 2018, have gross internal areas of 43,218 sqm and 34,442 sqm (totalling 77,660 sqm). The properties, designed and constructed to the latest modern logistics specification, are well suited to meet occupier demands, with minimum eaves heights of 10 metres along with significant yard areas.
Phase I: 55,447 sqm is let to three tenants while 22,213 sqm, which is currently vacant, benefits from a two-year vendor’s rental guarantee. This reflects a weighted average unexpired lease term of 5.0 years to expiry (4.5 years to break). All rents are subject to annual upwards only indexation to 100% of local CPI.
Phase II: Phase II of the asset is an adjacent plot of land of approximately 45,000 sqm suitable for constructing a building with a GIA of approximately 22,400 sqm. The company has entered into a funding agreement with the vendor to bring forward the development of this phase on letting, increasing the company’s investment in the asset by approximately €15 million.
Marketing of the Phase I vacancy and Phase II development is being carried out by the vendor, European Logistics Investment B.V. (ELI), and their joint venture development partner, Panattoni, who have a wide reach in the Polish market.
Nick Preston, Fund Manager of Tritax EuroBox, commented: “We are delighted to announce the twelfth investment for Tritax Eurobox plc, bringing the total amount invested to over €784.1 million and the Company’s LTV to 43%, close to the target level of 45%. The off-market acquisition of these newly developed, high specification assets situated in a prime logistics location at Strykow in Poland, is at an attractive and accretive yield.”
