Sale of asset in Malmö, Sweden for SEK320 million
Sale of asset in Malmö, Sweden for SEK320 million
Tritax EuroBox plc (the "Company"; tickers: EBOX (Sterling), BOXE (Euro)) has successfully exchanged contracts for the sale of its redevelopment site in Malmö, Sweden to a data centre owner-occupier for a headline price of SEK320 million[1]. The net sale price is 39% above the valuation as at 31st March 2023.
Summary
· The Company acquired the property with the intention of redeveloping the site for a logistics scheme of c.60,700 sqm.
· Since acquisition, market conditions have weakened, with the expected returns from the development not now as compelling as selling the site for an alternative use.
· The sale is 39% above the March 2023 valuation level and 14% above the acquisition price, net of transaction costs and our developer-partner fees.
· Proceeds will be primarily used to pay down debt as part of the programme to reduce the leverage in the Company.
Background
The 95,000 sqm site was acquired in April 2021 for a consideration of SEK223 million as a short-term sale and lease back to Atria Group, with the property becoming vacant in August 2023. Given the weaker market fundamentals and increased construction costs, the Company has decided to exit the land at a headline price above both valuation and acquisition cost. The sale enables the Company to realise a profitable disposal.
In the Interim Results announcement in May 2023, we outlined our intention to undertake asset disposals of at least €150 million over the following 12-18-month period. The programme's aim is to lower the loan to value (LTV) ratio towards our preferred percentage range in the low 40s and to fund existing opportunities from within the portfolio. Following the disposal of Hammersbach in the summer, and the recently announced sale of Bochum, this transaction demonstrates further progress of this programme and brings gross sales signed so far to c.€139 million.
Company commentary
Alina Iorgulescu, Investment Director, Tritax EuroBox plc, commented:
"The sale of Malmö is the third asset sold as part of the disposal programme outlined in our interim results. The sale reflects our conclusion that potential returns from the necessary capital investment for the redevelopment of the site were less attractive than disposing of the site for an alternative use and realises profits sooner than anticipated. The transaction is aligned with our strategy of recycling capital to reduce leverage and provides further evidence of Tritax EuroBox's disciplined approach to capital allocation. Further disposals have been identified and we remain confident of achieving our target loan to value percentage of low 40s over the next 6 to 12 months."
Further information
Tritax EuroBox plc
+44 (0) 20 8051 5070
Phil Redding - CEO
Mehdi Bourassi - CFO
Charles Chalkly - Investor Relations
Kekst CNC (Media enquiries)
Tom Climie / Guy Bates
+44 (0) 7760 160 248 / +44 (0) 7581 056 415
tritax@kekstcnc.com
Notes
Tritax EuroBox plc invests in and manages a well-diversified portfolio of Continental European logistics real estate. These assets fulfil crucial roles in logistics and distribution supply chains, and are located in established logistics markets near major population centres across core Continental European countries.
Our high-quality portfolio is highly sustainable, offers predictable and predominantly inflation-linked income and has opportunities for capital growth through active asset management. These attributes underpin our ability to generate attractive returns for Shareholders over the long term.
The Manager, Tritax Management LLP, has assembled a full-service, pan-European capability for the Company, combining in-house leadership and strategic expertise with close partnerships with leading European developers and asset managers.
The Manager comprises a skilled, diverse team of real estate professionals with expertise across investment, asset management, development, finance, business analysis, research and communications. This is supplemented with specialist, on-the-ground developers, and asset and property managers with strong market standings in the Continental European logistics sector.
Further information on the Company is available at: tritaxeurobox.co.uk
The Company's LEI is: 213800HK59N7H979QU33.
[1] c.€28 million.
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