The purchase of Junction Six Logistics Park, Birmingham completed in July 2023 for £58 million. This off-market transaction was Tritax Big Box REIT's first multi-let urban logistics acquisition. The asset was acquired off-market within a very quick timeframe.
The key attraction of this asset, aside from the ultra-prime urban location, was the reversionary potential available through the open market rent reviews. The passing rent at the time of acquisition equated to an average of £7.30 psf compared to an estimated market rental level at the time which offered approximately 40% upside. Combined with a WAULT of 1.6 years, extending leases and capturing rental upside was a key initiative of the business plan.
Built in the late 1990s, the asset provides an opportunity to invest and upgrade both the common parts and individual buildings through improved amenity provision and enhanced ESG credentials, as well as improving the overall aesthetics of the estate. In doing so there is an opportunity to improve the attractiveness of the estate to occupiers and, in turn, drive further rental growth and returns over time.
This was Tritax Big Box’s first venture into the multi-let urban logistics sector and it was therefore expected this acquisition would receive significant attention from investors on the REIT’s ability to enact its business plan.
