London prime logistics and real estate investor to make “highly sought-after” £64m German acquisition

London based prime logistics and real estate investor Tritax EuroBox announced that it has entered into a conditional agreement with a subsidiary of Dietz AG for the speculative forward funding acquisition of a €76.4m (approx. £64.4m) logistics asset in the Düsseldorf region of Germany.

The asset, currently being constructed by the company’s development partner Dietz Aktiengesellschaft, is held freehold and, once built, will comprise three adjacent units with a total gross internal area of approximately 36,437 sq m. The three units offer flexible leasing options either to be let to multiple tenants or a single tenant.

The acquisition price of €76.4m reflects a net initial yield of 3.3 per cent based on the rental guarantee income. Market rental levels in this location are expected to exceed €6.00 per square metre per month for warehouse space.

Dormagen, located between Cologne and Düsseldorf, is considered one of the principal logistics areas in Germany and is characterised by a scarcity of available development land and available buildings coupled with strong occupier demand. Dormagen is a “highly sought-after location”, well connected to the A1, A46 and A57 motorways.

This acquisition forms part of the continued deployment strategy for Tritax EuroBox following its successful equity raise in September 2021.

Alina Iorgulescu, assistant fund manager of 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 €800m.

“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.”