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Acquisition of Two Modern Logistics Units and Development Land in a Prime Location Near Lodz, in Central Poland for €51.8 million

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Acquisition of Two Modern Logistics Units and Development Land in a Prime Location Near Lodz, in Central Poland for €51.8 million

3 February 2020

The Board of Tritax Eurobox plc (tickers: EBOX (Sterling), BOXE (Euro)), which invests in Continental European logistics real estate assets, announces it has acquired two recently developed prime logistics properties and development land, positioned in the core logistics location of Strykow, near Lodz 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 potential to add value through the letting of vacant units and development of the land.

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 (“GIA”) 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.

Building 1: 43,218 sqm is let to Arvato Polska sp z.o.o (“Arvato”) until January 2025 with tenant break option in January 2024. Arvato is an international logistics service company, part of Bertelsmann Group, the global media, services and education group which generated revenues of €17.7 billion in its 2018 financial year. Arvato provides international, third party logistics services for retailer H&M from this building.

Building 2: 8,942 sqm is let until July 2029 to Stalatube sp z.o.o, a leading provider of stainless-steel solutions. A further 3,287 sqm is let to the Polish operations of German packaging company, Tillmann Wellpappe, until July 2029 with a parent company guarantee.

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 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 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.

We are confident of delivering the identified asset management plan that is expected to provide further value from these assets, capitalising on this established logistics location with strengthening supply/demand fundamentals, excellent transport links and a robust labour market. Together, this will further support the Company’s delivery of secure long-term income to shareholders and an attractive total return.”

For further information, please contact:

Tritax Group
Nick Preston
James Dunlop
+44 (0) 20 7290 1616

Jefferies International Limited
Gary Gould
Stuart Klein
+44 (0) 20 7029 8000

Kempen & Co
Dick Boer
Thomas ten Hoedt
+31 (0) 20 348 8500

Akur Limited
Anthony Richardson
Tom Frost
Siobhan Sergeant
+44 (0) 20 7493 3631

Maitland/AMO (Communications Adviser)
James Benjamin
+44 (0) 20 7379 5151
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, set against a backdrop of resurgent economic growth across much of Continental Europe.

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. The appointed asset managers Logistics Capital Partners and Dietz AG are logistics specialists and offer the Company exposure to high quality asset management expertise and access to their respective development pipelines, providing acquisition opportunities across Continental Europe.

The Company is targeting, on a fully invested and geared basis, an initial Ordinary Share dividend yield of 4.75% p.a.¹, which is expected to increase progressively through regular indexation events inherent in underlying lease agreements, and a total return on the Ordinary Shares of 9.0% p.a.¹ over the medium-term. The Company intends to pay dividends on a quarterly basis with shareholders able to receive dividends in Sterling or Euro.

Further information on Tritax EuroBox plc is available at www.tritaxeurobox.co.uk

1. Euro denominated returns, by reference to IPO issue price. These are targets only and not profit forecasts. There can be no assurances that these   targets will be met and they should not be taken as indications of the Company’s expected or actual future results. Accordingly, potential investors should not place any reliance on the target in deciding whether or not to invest in the Company and should not assume that the Company will make  any distributions at all and should decide themselves whether or not the target is reasonable or achievable.