Tesco is to sign the largest single warehouse letting of the year at Evans Property Group’s Fradley Park in Lichfield.
The retailer is set to take 850,000 sq ft at the Leeds-based property company’s site on the A38 between Birmingham and Derby, which it will use to distribute products around the region.
North Rae Sanders, GVA Grimley and Kingston are the letting agents at Fradley Park; Lambert Smith Hampton is advising Tesco.
The pre-let is subject to planning permission being granted for the property, which will include 50,000 sq ft of ancillary offices, although ground works for the building have already commenced.
Tesco will pay around £4.50 per sq ft on a 15-year lease. The rent is lower than the park’s quoted figure of £5.25 per sq ft because of the unit’s vast size.
The warehouse deal marks the latest in the retailer’s expansion programme in the Midlands. In April, it signed for 383,000 sq ft at ProLogis’s Crossflow in Crewe, and in 2005 it took 750,000 sq ft at Daventry International Rail Freight Terminal. Elsewhere it is taking 700,000 sq ft of distribution space in Goole, East Yorkshire, and 800,000 sq ft Farnborough in Hampshire.
The last deal of a comparable size was a letting in two buildings to Next at the St Paul’s Developments scheme in Brookfields near Rotherham, which was agreed at the end of last year.
Evans is not expected to sell the property, even though the sale of a large shed with Tesco as a tenant could fetch a sub-5 per cent yield, because it favours retaining assets long term. It is believed the development cost for the Fradley Park unit could be more than £60m.
Fradley Park is a 300 acre warehouse and office scheme with consent for four million sq ft, of which 1.6 million sq ft (148,644 sq m) has already been built.