TIDMEBOX TIDMBOXE
RNS Number : 2105F
Tritax EuroBox PLC
18 March 2022
18 March 2022
Eleventh investment in Germany for Tritax EuroBox
ACQUISITION OF PRIME LOGISTICS ASSET IN THE DUSSELDORF LOGISTICS
REGION OF GERMANY FOR EUR76.4 MILLION
Tritax EuroBox plc ("Tritax EuroBox" or the "Company") (ticker:
EBOX (Sterling) and BOXE (Euro)), which invests in high-quality,
prime logistics real estate strategically located across
continental Europe, announces that it has entered into a
conditional agreement with a subsidiary of Dietz AG (the "Dietz
Seller") for the speculative forward funding acquisition of a
EUR76.4 (1) million logistics asset in the Düsseldorf region of
Germany (the " Dormagen Proposal " ).
The asset, currently being constructed by the Company's
development partner Dietz Aktiengesellschaft ("Dietz AG"), is held
freehold and once built will comprise three adjacent units with a
total gross internal area of approximately 36,437 square metres.
The three units offer flexible leasing options either to be let to
multiple tenants or a single tenant.
The asset benefits from an eighteen-month rental guarantee from
the Dietz Seller at a rent reflecting EUR5.60 per square metre per
month for warehouse space. The acquisition price of EUR76.4 million
reflects a net initial yield of 3.3% based on the rental guarantee
income. Market rental levels in this location are expected to
exceed EUR6.00 per square metre per month for warehouse space.
Dormagen, located between Cologne and Düsseldorf, is considered
one of the principal logistics areas in Germany and is
characterised by a scarcity of available development land and
available buildings coupled with strong occupier demand. Dormagen
is a highly sought-after location, well connected to the A1, A46
and A57 motorways.
The Dormagen Proposal presents a further opportunity to meet
several of the Company's sustainability objectives via the
redevelopment of a brownfield site targeting a DGNB Gold
Certificate in use sustainability standard.
This acquisition forms part of the continued deployment strategy
for Tritax EuroBox following its successful equity raise in
September 2021.
Completion of the acquisition is subject to, among other things,
shareholder approval as Dietz AG is considered a related party to
the Company under the Listing Rules. A circular containing further
information about the Dormagen Proposal and a notice convening a
General Meeting of the Company at which shareholders will be asked
to vote in favour of a resolution to approve the Dormagen Proposal
will be posted to shareholders as soon as practicable.
Further details of the Dormagen Proposal, including the key
commercial terms, are set out in the appendix to this
announcement.
Alina Iorgulescu, Assistant Fund Manager of Tritax EuroBox,
commented:
"We are delighted to be acquiring this asset, which is the
eleventh German investment for Tritax EuroBox, bringing our total
amount invested in the country to over EUR800 million. This
off-market acquisition gives us the ability to control the desired
leasing profile of the scheme through capturing the rental growth
evident in the market, and also allowing the Company to introduce
open market rent reviews into the lease, providing a mechanism to
capture the expected future rental growth driven by the continued
favourable imbalance in supply and demand in the German logistics
market.
We remain focused on exercising strict discipline in investing
in these prime logistics locations in Germany. The powerful
structural trends continue to drive occupier demand in these prime
logistics locations in the Rhine-Ruhr region of Germany, providing
us with long term embedded value in the assets we acquire."
Notes
1 Property price. The Company will acquire the asset by way of a
share deal, purchasing 89.9% of the shares in Dietz FNL 5.
Grundbesitz GmbH.
For further information please contact:
Tritax Group
+44 (0) 20 8051 5070
Nick Preston
Mehdi Bourassi
Jo Blackshaw (Investor Relations)
Maitland/AMO (Media inquiries)
James Benjamin
+44 (0) 7747 113 930
tritax-maitland@maitland.co.uk
The Company's LEI is: 213800HK59N7H979QU33.
Notes:
Tritax EuroBox plc invests in and manages a well-diversified
portfolio of well-located Continental European logistics real
estate assets that are expected to deliver an attractive capital
return and secure income to shareholders. These assets fulfil key
roles in the logistics and distribution supply-chain focused on the
most established logistics markets and on the major population
centres across core Continental European countries.
Occupier demand for Continental European logistics assets is in
the midst of a major long-term structural change principally driven
by the growth of e-commerce. This is evidenced by technological
advancements, increased automation and supply-chain
optimisation.
The Company's Manager, Tritax Management LLP, has assembled a
full-service European logistics asset management capability
including specialist "on the ground" asset and property managers
with strong market standings in the Continental European logistics
sector.
Further information on Tritax EuroBox plc is available at
www.tritaxeurobox.co.uk
APPIX
Background to and reasons for the Dormagen Proposal
The Dormagen Proposal forms part of the deployment of the
proceeds of the capital recently raised by the Company following
its issue of new ordinary shares in September 2021.
The Company has entered into a conditional sale and purchase
agreement with the Dietz Seller, pursuant to which the Company
would acquire a piece of land located in Dormagen, Germany (the
"Dormagen Land") from the Dietz Seller, commit to the construction
of a logistics asset on the Dormagen Land (the "Dormagen Asset")
and enter into a shareholders and option agreement with Dietz
AG.
The acquisition is structured as a corporate transaction, with
the Company acquiring from the Dietz Seller 89.9 per cent. of the
issued and outstanding shares in Dietz FNL 5. Grundbesitz GmbH (the
" Dormagen SPV " ), being the entity holding the Dormagen Asset for
a total consideration, including future construction costs and a
developers' margin, with an initial preliminary purchase price of
EUR76.4 million. Dietz AG will retain the remaining 10.1 per cent.
interest in the Dormagen SPV.
The 67,164 square metre development site will provide for the
construction of a logistics facility of approximately 36,437 square
metres including office and social areas and outdoor facilities.
Construction of the Dormagen Asset is expected to be completed by
February 2023.
The Dormagen SPV has not yet entered into a lease agreement with
any potential occupier with regard to the Dormagen Land. The Dietz
Seller shall be entitled to let the Dormagen Asset on behalf of the
Dormagen SPV to one or more tenants on market terms in accordance
with the lease criteria set out within the Dormagen Sale Agreement
(as defined below).
The Company and Tritax Management LLP believe that the Dormagen
Proposal represents good value for the Company and will help the
Company to achieve its near-term investment objectives. In addition
to the investment returns expected to be generated from the
Dormagen Proposal, it will also represent the Company's eleventh
acquisition in Germany, helping the Company build scale and spread
costs over a wider asset base. As the twenty-fourth asset in the
Company's portfolio, this asset will also provide wider
diversification to spread risk across the portfolio.
Principal terms of the Dormagen Proposal
-- On 17 March 2022, the Company entered into a conditional sale
and purchase agreement with the Dietz Seller pursuant to which the
Company would acquire the Dormagen Land from the Dietz Seller,
commit to the construction of the Dormagen Asset (the " Dormagen
Sale Agreement " ) and enter into a shareholders and option
agreement with Dietz AG;
-- The net initial preliminary aggregate acquisition price of
approximately EUR76.4 million (approximately GBP64.6 million) (1)
is split into a purchase price of approximately EUR38.7 million for
the majority stake of 89.9 per cent. in the Dormagen SPV and
approximately EUR12.9 million for shareholder loans to the Dormagen
SPV. Development costs necessary to finalise the Dormagen Asset are
to be borne by the Company as part of the sale conditions. The
acquisition price of EUR76.4 million reflects a net initial yield
of 3.3 per cent. based on the rental guarantee income.
-- As part of the Dormagen Proposal, the Dietz Seller has agreed
to provide the Company with a rental guarantee for a period of 18
months from completion of the construction of the Dormagen Asset of
EUR5.60 per square metre per month for warehouse space
(approximately EUR210,472) (excluding VAT, if any), subject to
certain conditions which are customary for transactions of this
nature.
-- Subject to the completion of the sale and purchase of the
89.9 per cent. interest in the Dormagen SPV pursuant to the
Dormagen Sale Agreement, Dietz AG and the Company have entered into
a shareholders agreement in respect of the retained 10.1 per cent.
Dietz AG interest and the 89.9 per cent. Company interest in the
Dormagen SPV.
-- On 25 November 2021, the Dormagen SPV entered into a
construction agreement with Wurzel Baugesellschaft mbH ( " Wurzel "
) (the " Dormagen Construction Agreement " ), pursuant to which
Wurzel shall procure all ground works regarding the Dormagen Land,
within six months of the issuance of a public building permit. The
Dormagen Construction Agreement contains certain undertakings and
obligations customary for agreements relating to construction and
development services.
-- It is expected that the Dormagen SPV will enter into a
general contractor agreement with Max Bögl Stiftung & Co. KG
(the " General Contractor " ), pursuant to which the General
Contractor will procure the construction of the Dormagen Asset and
fulfil the obligations of the Dormagen SPV under the City of
Dormagen Development Agreement until 13 February 2023 (the "
Proposed Development Agreement " ). The Proposed Development
Agreement contains certain undertakings and obligations customary
for agreements relating to construction and development
services.
-- The gross property assets of the Dormagen SPV, which are the
subject of the transaction, total approximately EUR73.9 million as
of 17(th) March 2022. Other net assets and liabilities amount to a
net liability, including shareholder loans, of approximately
EUR33.6m million. The Company expects the estimated rental value
from the Dormagen Asset upon completion to be a minimum of
approximately EUR2.5 million per annum (based on the level of the
rental guarantee for the Dormagen Land).
-- The Dormagen Sale Agreement is conditional on the approval of
shareholders at the General Meeting.
(1) Based on a EUR:GBP conversion rate of 0.85:1 as at
17.03.2022 17:00 GMT
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