Tritax Big Box advances data centre strategy with Chelmsford development

Tritax Big Box REIT has announced a new development management agreement with its Manager, Tritax Management, to build a 125MW data centre in Chelmsford, Essex.

Data centre

This marks the second data centre project in Tritax Big Box's expanding pipeline, mirroring arrangements already in place for its Heathrow data centre at Manor Farm.

Under the agreement, Tritax Management will oversee all development and technical aspects of the Chelmsford scheme. Their responsibilities include securing planning permission, managing construction, facilitating pre-leasing, providing electrical expertise, and handling all power-related elements.

Tritax Management will receive approximately £3.3 mln (€3.85 mln) for project assembly services completed to date. Further compensation is contingent on project milestones: a development management fee of up to 5% of the total development cost, payable upon planning consent, and a 17.5% share of the total development profits, contingent on the data centre's full completion and successful leasing. Notably, half of Tritax Management's profit share will be used to purchase shares in Tritax Big Box.

These payments are factored into the targeted yield on cost for the Chelmsford scheme, which is projected to be between 10-11%.

The Board of Tritax Big Box, advised by Jefferies International Limited, has deemed the terms regarding the development management fee and profit share to be fair and reasonable for shareholders.