Tritax Eurobox and Dietz Seller, a subsidiary of Dietz AG, have entered into a conditional agreement to acquire the assets of Dietz subsidiary in Dormagen, Germany.
Tritax Eurobox is a REIT which invests in ‘high-quality, prime logistics real estate’ across Europe.
Dormagen Proposal
The Dormagen asset will be acquired for €76.4m and the consideration of €76.4m is divided into a purchase price of around €38.7m for the majority stake of 89.9% in Dormagen SPV and approximately €12.9m for shareholder loans to the Dormagen SPV.
The Dormagen SPV will cover the development expenses, and the conditions of the offer are subject to shareholder approval due to the Dietz AG’s connections to the Listing Rules.
The freehold held asset being built by Dietz Aktiengesellschaft, the development partners of Dietz Seller will have a total gross internal area of roughly 36,437 m² comprised of three adjacent units. The three units are independent of one another and thus ideal for flexible leasing options.
The asset has an eighteen-month rental guarantee from the Dietz Seller, based on a monthly rate of €5.60 per m² for warehouse space.
Based on the rental guarantee earnings, the transaction price of €76.4m indicates a net initial yield of 3.3%. For warehouse space, market rental rates are likely to reach €6.00 per m² per month in this region.
Dormagen is an area with high demand and is located in one of the prime logistics areas of Germany, between Cologne and Düsseldorf. The area offers good connectivity to motorways such as the A1, A46 and A57.
ESG
The Dormagen proposal provides another chance for the Tritax Eurobox to accomplish several of its sustainability goals by redeveloping a brownfield property to satisfy the DGNB Gold Certificate.
Alina Iorgulescu, Assistant Fund Manager, 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 €800 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.”