TIDMEBOX TIDMBOXE
RNS Number : 3114S
Tritax EuroBox PLC
15 November 2021
15 November 2021
FUNDING OF PRIME LOGISTICS ASSET IN THE RHINE-RUHR REGION OF
GERMANY FOR EUR118 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 agreed to acquire land
and fund the development of an EUR117.9 (1) million asset in a
prime location in the Rhine-Ruhr region in Germany, which is
pre-let to the Rhenus Warehousing Solutions SE & Co KG
("Rhenus"), one of the leading global logistics service providers
(the "Bönen Proposal").
The property will comprise a single building with a total gross
internal area of approximately 66,065 sqm comprising six
purpose-built logistics units located in the heart of the prime
logistics location in the Rhine-Ruhr region. The development is
expected to be completed in February 2023.
This transaction is structured as a forward funding development
opportunity, where the Company will buy the land initially and then
fund the construction of the building under a fixed price contract.
The total cost of the land and development expenditure is capped at
EUR117.9 million. From receipt of the building permit expected by
February 2022 and during the 12-months construction phase, the
Company will receive from the developer an income return equivalent
to the agreed net initial yield.
The optimal location of Bönen in the Rhine-Ruhr metropolitan
region allows the asset to access motorway infrastructure and be a
part of the most important logistics hub in Europe, where one
quarter of all logistics centers in Germany are located.
This project meets several of the Company's sustainability
objectives via redevelopment of a brownfield site to a DGNB Gold in
use sustainability standard.
The entire building is pre-let on a 15-year lease to Rhenus,
commencing on practical completion expected in February 2023. The
lease will generate a total annual rent of approximately EUR4.1
million.
The development cost of EUR117.9 million reflects a net initial
yield of 3.5% based on the income from the agreed upon lease.
This acquisition forms part of the deployment strategy for
Tritax EuroBox following the successful equity raise in September
2021.
The Company has entered into a conditional contract with several
entities including Dietz Aktiengesellschaft, all part of the Dietz
group of companies (collectively referred to as "Dietz AG") in
respect of the Bönen Proposal.
Alina Iorgulescu, Assistant Fund Manager of Tritax EuroBox,
commented:
"The Rhine-Ruhr region of Germany is the largest population
centre in the country and is an area which benefits from excellent
transport connectivity and strong supply / demand fundamentals.
This is the tenth German investment in the Tritax EuroBox
portfolio, bringing our total amount invested in the country to
just over EUR700 million, providing significant critical mass in
the most important logistics market in Europe. This off-market
funding, developed by our long term development partner Dietz AG,
is at an attractive yield which also offers the opportunity to
capture the rental growth evident in the prime German logistics
market."
Related Party Transaction and General Meeting
As Dietz AG is considered as a related party to the Company
under the Listing Rules, the Bönen Proposal is subject to
shareholder approval. A circular containing further information
about the Bönen Proposal as well as the Gelsenkirchen Proposal
announced by the Company on 22 October 2021, and a notice convening
a General Meeting of the Company at which shareholders will be
asked to vote in favour of resolutions to approve the proposed
transactions will be posted to shareholders as soon as practicable.
Further details of the Bönen Proposal, including the key commercial
terms, are set out in the appendix to this announcement.
Notes
1 Property price. The Company will acquire the asset by way of a
share deal, purchasing 89.9% of the shares in Dietz 23. 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 Bönen Proposal
The Bönen Proposal forms part of the deployment strategy for
Tritax EuroBox following the successful equity raise in September
2021.
The acquisition is structured as a corporate acquisition, with
the Company acquiring 89.9 per cent. of the shares in the entity
holding the Bönen asset (the "Bönen SPV") from Dietz AG. The total
consideration is approximately EUR117.9 million, which includes the
commitment to fund the development of a new, highly-specified
logistics warehouse which has been pre-let to Rhenus. Dietz AG will
retain the remaining 10.1 per cent. interest in the Bönen SPV.
The property will comprise a single building with a total gross
internal area of approximately 66,065 sqm comprising six
purpose-built logistics units located in the heart of the prime
logistics location in the Rhine-Ruhr region. The development is
expected to be completed in February 2023. The building will then
be fully let to Rhenus on a 15-year lease for an annual rental of
approximately EUR4.1 million.
The Company and Tritax Management LLP believe that the Bönen
Proposal represents good value for the Company and will assist in
achieving the Company's near-term investment objectives. In
addition to the investment returns expected to be generated from
the Bönen Proposal, it will also represent the Company's tenth
acquisition in Germany, helping the Company build scale and spread
costs over a wider asset base. As the twentieth asset in the
Company's portfolio(1) , this will also provide wider
diversification to spread risk across the portfolio.
Jones Lang LaSalle Ltd ("JLL") has independently valued the
completed Bönen asset.
Principal terms of the Bönen Proposal
-- On 12 November 2021, the Company entered into a conditional
share purchase agreement with the Dietz AG pursuant to which Dietz
AG agreed to sell and the Company agreed to purchase an 89.9 per
cent. interest in the Bönen SPV (the "Bönen Sale Agreement").
-- The total consideration to be paid by the Company, including
the repayment of existing shareholder loans, construction fees and
other fees and costs, is fixed at approximately EUR117.9 million
and will be made in stage payments, with the first payment to be
paid on completion under the Bönen Sale Agreement, with the
remainder paid in two stages: upon obtaining the building permit in
respect of the Bönen asset and upon practical completion of the
Bönen asset.
-- As part of the proposal, during construction of the Bönen
asset, Dietz AG will pay the Bönen SPV a rental guarantee until
practical completion.
-- Upon completion of the sale and purchase of the 89.9 per
cent. interest in the Bönen SPV, Dietz AG and the Company will
enter 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 Bönen SPV.
-- The gross property assets of the Bönen SPV, which are the
subject of the transaction on acquisition, total approximately
EUR22.7 million as at 31 October 2021. Other assets and
liabilities, which include shareholder loans, amount to a net
liability of approximately EUR24.6million. Post completion of the
development, and assuming no other changes, the Company expects the
total value of the Bönen asset to exceed EUR117.9 million.
-- The Bönen Sale Agreement is conditional on the approval of
shareholders at the General Meeting.
-- It is anticipated that a building contract with a third party
building contractor will be entered into, pursuant to which the
Company will procure the construction of the Bönen asset.
Note:
(1) - this includes the acquisitions relating to the Rosersberg,
Oberhausen, Settimo Torinese and Gelsenkirchen assets, which are
also subject to completion.
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