LONDON: Tritax Big Box REIT plc has announced the acquisition of a 74-acre site within the Slough Availability Zone near Heathrow Airport. The site, known as the Manor Farm site, is a key location for data centers within the EMEA region.

Simultaneously, Tritax has secured a 50% stake in a joint venture with a leading European renewable energy provider. This partnership facilitates accelerated power delivery to the Manor Farm site through pre-existing grid connections. The acquisition of this interest is classified as a related party transaction under UK Listing Rules.

Pending planning consent, the acquisitions aim to expedite the delivery of up to 147 megawatts of power for the development of a major data center at Manor Farm. Tritax Management LLP, working alongside the joint venture partner, has also created a pipeline for additional data center opportunities in the UK, utilizing approximately 1 gigawatt of available power.

The Manor Farm site, located near key data cable routes, is positioned for high connectivity and attractiveness to hyperscaler and co-location operators. The initial phase of development targets a 107 MW data center with construction expected to start in the first half of 2026. A second phase, pending planning approval, would add 40 MW, bringing the total potential to 147 MW.

Phase 1 of the project is projected to be one of Europe’s most advanced data centers, featuring 448,000 square feet of data halls across three floors. The joint venture provides grid connections to two independent substations, ensuring resilience and co-located battery storage.

The Phase 1 data center will be developed on a “powered shell” basis, conditional on planning consent and securing a pre-let. Estimated capital expenditure for the project is approximately £365 million, covering land, construction, joint venture stake, transaction costs, and power infrastructure. Tritax plans to fund the project through existing resources and capital recycling.

The expected rental levels forecast a yield on cost of approximately 9.3% for Phase 1, surpassing typical returns in Tritax’s logistics development pipeline. The prime London location, scale, and accelerated delivery timeline contribute to significant development profits for shareholders. Planning approval for Phase 1 is anticipated in the second half of 2025, with construction starting in the first half of 2026 and completion in the second half of 2027.

Tritax Management has identified acute grid connection scarcity as a barrier to data center development in prime locations. The joint venture partner’s pre-existing grid agreements enable faster power delivery than direct grid applications. The joint venture holds rights to the Manor Farm grid connections, with the partner delivering power and infrastructure while Tritax manages land and real estate components.

The UK Government’s recent classification of data centers as critical national infrastructure underscores their importance to the economy. Global demand for data centers, driven by cloud computing and AI adoption, is expected to grow annually by 19-22% from 2023 to 2030.

The Manor Farm site is being acquired from Airport Industrial Property Unit Trust, with Tritax Management receiving a consideration for its 50% joint venture stake. Tritax Management will also receive development management fees and profit shares contingent on planning consent and data center delivery.

Aubrey Adams, Chairman of Tritax Big Box, commented, “This is a decisive and exciting first step for the Company in the very attractive data centre market which the Manager has unlocked with its power and real estate capabilities. This gives the Company a considerable competitive advantage in capturing the growing demand for data centre infrastructure. The combination of Manor Farm’s prime London location and accelerated access to critical grid connection agreements creates the opportunity to develop quickly one of the UK’s largest data centres and deliver exceptional returns for our shareholders.

“Over the past four years, the Manager has independently developed and invested in its power capabilities, securing a joint venture arrangement with one of Europe’s largest major renewable and low-carbon energy generators which the Company is now acquiring at Manor Farm.

This provides accelerated access to power in this prime data centre location, where a lack of power has significantly restricted the development of these nationally critical infrastructure projects. Having taken extensive and independent professional advice, the Board of Tritax Big Box has successfully negotiated preferential access and terms for this opportunity, which generates exceptional returns and complements our logistics development pipeline.

The Board has also negotiated a right of first refusal with the Manager for all future data centre opportunities with up to c.1 GW of power capacity.”