Redefine Properties’ 95% owned European Logistics Investment (ELI) has concluded the sale of two A grade logistics warehouse buildings totaling 77,660 sqm of gross lettable area and development land suitable for construction of an additional warehouse of 22,407 sqm gross lettable area in Strykow, Poland to UK listed Investment Trust Tritax EuroBox Plc for €51.8 million (approx. R844 million).
Redefine’s share of the gross proceeds is €49.2 million (approx. R802 million).
The sale of Strykow to Tritax EuroBox plc is a precursor to the introduction of Madison as an equity investor into ELI.
Strykow, part of the European Logistics Platform portfolio, was ELI’s first development, with construction having started in the second half of 2018 and completed in February 2019. It is one of Poland’s largest logistics markets and is situated close to Lodz in Central Poland.
Speaking on the transaction, Andrew Konig, CEO, Redefine Properties says, “The sale further advances Redefine’s stated intention to strengthen its balance sheet through the recycling of ELI’s first development at a substantial premium to its development cost. It also bolsters our liquidity and represents the raising of funding at a cost of 6.1%.”
“Prior to our discussions with Madison for an equity stake in ELI, we received an unsolicited approach from Tritax EuroBox whose interest was to own our assets in Strykow. We elected to move forward with the sale of the entire property, which is a win for everyone involved as the deal is value accretive. Furthermore, the net proceeds, after settling debt of circa €22 million (approx. R359 million), of the sale will flow back into the country”
“The development was originally approved at a yield of 8,0%. The disposal of the property at a net investment yield of 6,1% compares favourably to prevailing market yields and shows a strong appetite from investors for Polish logistics investments,” adds Konig.