On 19 November 2018 the Company announced that it had exchanged contracts to acquire a newly built pre-let warehouse in Zeewolde, the Netherlands, for a purchase price of €29.25 million providing a net initial yield of 5.0%. The agreement with developer Borghese, a developer of logistics, residential and office and projects, is structured as a forward funded transaction with a 2.55% coupon rate. The development commenced in September 2018 and has an expected delivery date of 1 June 2019.
This high quality freehold property has been pre-let to VSH Fittings B.V., a strong covenant tenant, on a 15 year lease commencing in June 2019 and capped CPI indexation of 2.4% per annum in accordance with local provisions. VSH Fittings B.V. was founded 85 years ago and is a wholly-owned subsidiary of Aalberts Industries N.V., a Euronext listed company with over 16,000 employees, 70 business locations and activities in over 50 countries. The company specialises in the production and distribution of industrial valve products and fittings used for sprinklers, heating and piping systems.
Zeewolde is located in the heart of the Netherlands in the province of Flevoland, close to Almere, the fastest growing municipality in the Netherlands and Lelystad, an ideal location for national distribution. The economy of Flevoland is flourishing and will be boosted by the expansion of Lelystad Airport (both Transavia and Ryanair will be using the airport from 2019). The attractiveness of the region is proven by the development of a new warehouse for Inditex (Zara) with a total size of 100,000 square metres opening in 2019. Zeewolde is also ideally located close to several motorways, the A6, A27 and A28. In addition to its central location in the Netherlands, Zeewolde is well positioned with regards the availability of labour and the relatively low land costs, resulting in attractive rent levels.
The property is situated within an established logistics business park in Zeewolde, alongside other well-known logistics companies. The tenure is freehold and the total plot size is 55,000 square metres, with the warehouse comprising 35,000 square metres alongside office space and 161 parking places. Developed to the latest standards for modern logistics, the Manager believes that this together with the central location and the long lease with a strong covenant tenant will generate a durable income stream in the future.