South Korean investors buy Tesco logistics centre for €160m

DTZ Investors has pulled off the biggest logistics deal yet in the Irish Republic, acquiring a distribution centre in County Dublin.

The  €160 mln off-market deal was on behalf of KTB Investments & Securities and KTB Asset Management.

Located in Donabate, the property comprises 73,207sq m2 and was developed in 2007. Supermarket giant Tesco is the tenant on a lease until 2032.

David Peacock of DTZ Investors said: ´This off-market acquisition is an exceptional example of identifying a suitable investment opportunity that meets our client’s investment objectives and executing successfully on what is the largest single-asset logistics transaction in Ireland.

´The income profile, in terms of length and escalation, and strength of the Tesco plc credit provides for very attractive income investment characteristics.

´The transaction profile is further enhanced when considered against the backdrop of the very restricted supply of logistics assets of scale in Ireland and the building’s importance to Tesco’s Irish operations.´

DTZ was advised in the transaction by Cushman & Wakefield’s capital markets and debt and structured finance teams.

Clive Roche of Cushman & Wakefield said: ´Cushman & Wakefield are delighted to have sourced and advised on this landmark off-market acquisition. With steady occupier demand and ongoing supply constraints, particularly for larger units, the sector is expected to witness strong rental growth, and with investor appetite for the sector at an all-time high, additional yield compression is also likely.´

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