TIDMEBOX TIDMBOXE
RNS Number : 0794I
Tritax EuroBox PLC
10 August 2021
10 August 2021
Proposed investment in a second asset in Italy for Tritax
EuroBox
FORWARD FUNDING ACQUISITION OF 28,249 SQM LOGISTICS ASSET IN
PRIME LOCATION IN NORTHERN ITALY FOR EUR24.39 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 conditional contracts have been
entered into to acquire land and provide forward funding for the
development of a new highly specified and sustainable logistics
warehouse facility in Settimo Torinese near Turin, Northern Italy
for a total consideration of EUR24.39 million (the "Settimo
Torinese Proposal").
The property will be developed by LCP IT DC 3 S.r.l. ("LCP
Milan"), a wholly owned subsidiary of LCP Holdco Lux S.à.r.l. ("LCP
HoldCo") and part of the Logistics Capital Partners group of
companies, one of the Company's main development partners, under a
fixed price development contract. The construction of the facility
is expected to complete in 2022.
The high quality and sustainable cross-docked logistics
warehouse facility will comprise a gross leasable area of
approximately 28,249 square metres (sqm) and will be arranged as
two equal sized units in one single building, capable of being
leased either as a single building or two separate buildings. The
facility is expected to achieve a BREEAM Very Good rating and to
benefit from roof mounted photovoltaic panels.
The facility will be adjacent to the A4 'Turin-Trieste'
motorway, east of Turin, Italy's fourth largest city. The Italian
logistics market is currently characterised by record levels of
occupational take up, particularly in the northern part of the
country, as well as vacancy rates at a low level of around 2 per
cent.
The acquisition, currently unlet, benefits from a rental
guarantee provided by LCP Milan amounting to approximately EUR1.277
million from completion of the construction of the facility. This
amount is based on 12 months of the estimated rental value of the
facility, assuming a rent of EUR45 per sqm on the warehouse space.
In addition, the photovoltaic panels are expected to provide income
of EUR45,000 per annum. The transaction reflects an accretive net
initial yield of 4.8 per cent. after purchase costs and
non-recoverable expenditure.
As LCP HoldCo is considered as a related party to the Company
under the Listing Rules, the Settimo Torinese Proposal is subject
to shareholder approval. A circular containing further information
about the proposed transaction 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 Settimo Torinese Proposal
will be posted to shareholders as soon as practicable.
Nick Preston, Fund Manager of Tritax EuroBox, commented:
"Continuing the deployment of proceeds of our EUR230 million
equity raise in March this year and of our subsequent EUR500
million green bond issuance in June 2021 , we are delighted to
enter into conditional contracts to acquire our second asset in
Italy which complements our existing asset near Rome and further
reinforces the Company's ESG credentials. This development funding
provides us with the opportunity to add further value to the asset
in line with our evolved investment strategy. We are pleased to be
working with our partners, LCP, who have deep knowledge of the
Italian logistics market and an extensive development pipeline
which provides us access to well-located, high-quality logistics
assets with strong sustainability characteristics at attractive
yields on cost.
Italy, like other markets, is seeing growing online retailing
and supply chain optimisation, leading to increased demand for the
best located logistics properties. The pandemic has accelerated
these trends and further enhanced the prospects for the sector. We
remain confident that these long-term positive structural
tailwinds, combined with our high-quality portfolio and our ability
to unlock value from it, will help ensure that we will continue to
deliver shareholder value."
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
TRITAX EUROBOX PLC
FORWARD FUNDING ACQUISITION OF 28,249 SQM LOGISTICS ASSET IN
PRIME LOCATION IN NORTHERN ITALY FOR EUR24.39 MILLION
Background to and reasons for the Settimo Torinese Proposal
The Settimo Torinese 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 March 2021 and its
subsequent green bond issuance in June 2021.
The Company, through its wholly owned subsidiary, Minerva -
Fondo di Investimento Alternativo Immobiliare Riservato (the
"Purchaser") and Savills Investment Management SGR S.p.A.
("Savills"), acting in its capacity as managing company of the
Purchaser, has agreed to acquire the Settimo Torinese land from LCP
Milan and to fund the construction of the facility on the land for
which LCP Milan would be appointed to develop. As part of the
agreement with LCP Milan, the construction costs of the facility
will be fixed, providing the Company with clarity over the total
cost of the asset. The facility, when constructed, will comprise a
high quality logistics asset, located close to Turin, a key
logistics location in northern Italy. The intention is for the
facility to then be leased. There is currently no tenant(s)
identified for the facility and as part of the proposal LCP Milan
will provide the Company with a rental guarantee.
The Company and Tritax Management LLP (the "Manager") believe
that the Settimo Torinese 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 Settimo Torinese Proposal, it
will also represent the Company's second acquisition in Italy,
helping the Company build scale and spread costs over a wider asset
base. As the sixteenth asset in the Company's portfolio, this will
also provide wider diversification to spread risk across the
portfolio.
Jones Lang LaSalle Ltd ("JLL") has independently valued the
completed Settimo Torinese asset, which takes into account the
value of the Settimo Torinese land and the completion of the
facility. The JLL valuation equates to, in aggregate, EUR24.4
million.
Principal terms of the Settimo Torinese Proposal
-- On 9 August 2021, Savills, acting in its capacity as managing
company of the Purchaser, entered into a conditional framework
agreement with LCP Milan pursuant to which the Purchaser has agreed
to purchase the Settimo Torinese land (the "Sale Agreement").
-- The consideration of EUR24.39 million under the Sale
Agreement will be made in stage payments, with the first payment to
be paid on completion of the acquisition and the remaining amount
payable at certain phases over the period of the construction
programme.
-- The Sale Agreement is conditional on inter alia the approval
of shareholders of the Company at the general meeting and issuance
of a building permit from the Settimo Torinese local authorities by
no later than 30 September 2021.
-- Upon completion of the sale and purchase of the Settimo
Torinese land pursuant to the Sale Agreement, a development
contract will be entered into by Savills, acting in its capacity as
managing company of the Purchaser, pursuant to which LCP Milan will
be appointed as development manager to procure the construction of
the Facility from a third party general contractor. Under the
contract, LCP Milan will procure the construction of the facility
by appointing a general contractor for the design and construction
of the facility.
-- LCP Milan has also agreed to provide the Company with a
rental guarantee from completion of construction. The guarantee
amounts to approximately EUR1.277 million based on an estimated
rental value of EUR45 per square metre on the warehouse space. LCP
HoldCo will act as guarantor of the payment obligations undertaken
by LCP Milan under the rental agreement.
Related party aspects of the Settimo Torinese Proposal
LCP Services (UK) Limited ("LCP") has been appointed by the
Manager as the Company's asset manager in various countries in
Europe, including Italy and Belgium. Mr Kristof Verstraeten and Mr
Steven De Bie are directors of LCP, LCP HoldCo and/or other
entities within the LCP group (the "Related Party Directors") and
are considered related parties of the Company pursuant to Chapter
11 of the Listing Rules on the basis that they are also former
directors of certain subsidiaries of the Company formed for the
purposes of holding certain of the Group's assets in Belgium. As
the Related Party Directors are also key individuals in the context
of LCP's group, LCP and LCP HoldCo are considered associates of the
Related Party Directors and are therefore related parties of the
Company pursuant to Chapter 11 of the Listing Rules.
In December 2020, the Company entered into a sale and purchase
agreement with certain LCP group companies pursuant to which the
Company indirectly, through its subsidiary, acquired a logistics
facility located in Nivelles, Belgium for a total consideration of
EUR31.2 million (the "Nivelles Acquisition"). The Settimo Torinese
Proposal, when aggregated with the Nivelles Acquisition as required
by Chapter 11 of the Listing Rules, is classified as a related
party transaction pursuant to Chapter 11 of the Listing Rules. The
Settimo Torinese Proposal is therefore conditional on, amongst
other things, the approval of shareholders at a general meeting of
the Company.
The board of directors of the Company (the "Board"), having been
so advised by Jefferies International Limited ("Jefferies") acting
in its capacity as the Company's sponsor, considers the Settimo
Torinese Proposal to be fair and reasonable as far as shareholders
are concerned. In providing advice to the Board, Jefferies has
taken into account the Board's commercial assessment of the Settimo
Torinese Proposal.
Further information
A circular setting out further details of the Settimo Torinese
Proposal, the action to be taken 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 Settimo Torinese Proposal
will be posted to shareholders as soon as practicable.
Important notices:
This announcement has been issued by and is the sole
responsibility of the Company. The information contained in this
announcement is for background purposes only and does not purport
to be full or complete. The information in this announcement is
subject to change without notice. Subject to applicable law or
regulation, the issue of this announcement shall not, under any
circumstances, create any implication that there has been no change
in the affairs of the Company since the date of this announcement
or that the information in this announcement is correct as at any
time subsequent to the date of this announcement.
This announcement contains a number of "forward-looking
statements". Generally, the words "will", "may", "should",
"continue", "believes", "expects", "intends", "anticipates",
"forecast", "plan" and "project" or in each case, their negative,
or similar expressions identify forward-looking statements. Such
statements reflect the relevant company's current views with
respect to future events and are subject to risks, assumptions and
uncertainties that could cause the actual results to differ
materially from those expressed or implied in the forward-looking
statements. Many of these risks, assumptions and uncertainties
relate to factors that are beyond the companies' abilities to
control or estimate precisely, such as future market conditions,
changes in general economic and business conditions, introduction
of competing products and services, lack of acceptance of new
products or services and the behaviour of other market
participants. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to have
been correct. Shareholders should not, therefore, place undue
reliance on these forward-looking statements, which speak only as
of the date of this announcement. Except as required by applicable
law or regulation, the Company expressly disclaims any obligation
or undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based.
Jefferies, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as sponsor for the Company in connection with this announcement and
the proposed transaction and will not be acting for any other
person, or be responsible to any other person for providing the
protections afforded to Jefferies' clients or for advising any
other person on the contents of this announcement or any matter,
transaction or arrangement referred to herein.
A copy of the circular when published will be available from the
registered office of the Company and on the Company's website at
www.tritaxeurobox.co.uk. Neither the content of the Company's
website nor any website accessible by hyperlinks on the Company's
website is incorporated in, or forms part of, this
announcement.
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END
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August 10, 2021 02:00 ET (06:00 GMT)
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