Tritax buys Argos distribution centre

While Sainsburys has been bidding £1.4bn for the Home Retail Group, Tritax Big Box REIT has purchased Argos’s national distribution centre in Staffordshire for a price believed to be around £74.6 million.

The distribution centre at Barton Business Park at Burton on Trent, integrates modern design features that include an eaves height of between 12m and 30m as well as office accommodation. It has 653,670 of space and has very good motorway connectivity. It is very close to the A38 dual carriageway that has direct access to the M6 Toll, M42 and via the A50 and A511 to the M1. It also has good connections to rail and air cargo facilities.

Currently the property is leased to Argos which is owned by the Home Retail Group on a 12 year lease that has fixed annual rental increases of 3%.

Tritax partner Colin Godfrey said: “We are pleased to have completed this acquisition, the second investment following our recently oversubscribed £200m equity raise which closed in February.

“The highly automated facility is one of Argos’ key National Distribution Centres providing downstream supply of goods to Regional Distribution Centres and onward to stores or e-commerce customers.”

Sainsburys has bid on the Home Retail Group because of Argos excellent distribution network that is focused on its 800 stores nationwide and if successful could put the grocery giant into direct competition with Amazon that has recently done a deal to sell Morrisons food and groceries through its Amazon Pantry department. This could be the deal to watch for industry insiders and customers alike in the coming months as the two giants line up to do battle for multichannel e-commerce business.