Tritax Big Box REIT (LSE:BBOX) has entered into a development management agreement with Tritax Management LLP to advance a planned 125MW data centre project in Chelmsford, Essex. The scheme represents the company’s second large-scale data centre development and forms part of its broader strategy to build a significant presence in the UK digital infrastructure market.
Manager Appointed to Oversee Project Delivery
Under the agreement, Tritax Management will provide a range of services covering planning, construction management, technical power expertise and pre-leasing activities. The structure follows the model previously adopted for the company’s first major data centre project at Manor Farm near Heathrow.
Management believes the arrangement will provide the specialist expertise required to progress the project through planning, development and eventual occupation.
Fee Structure Includes Performance-Based Incentives
As part of the agreement, Tritax Management will receive approximately £3.3 million for project assembly and preparatory work already undertaken.
The manager will also be entitled to a development management fee of up to 5% of total project costs, subject to planning approval being secured. In addition, a performance-related profit-sharing mechanism has been agreed, allowing Tritax Management to receive 17.5% of project profits if the development is successfully completed and leased.
Half of any profit-share entitlement will be settled in Tritax Big Box shares, helping align the interests of management with those of shareholders.
Data Centre Ambitions Continue to Grow
The board, supported by advice from Jefferies International, concluded that the related-party arrangements are fair and reasonable for shareholders.
The Chelmsford scheme is targeting a yield on cost of between 10% and 11%, highlighting the attractive returns the company believes can be generated from data centre development. The project also reflects Tritax Big Box’s efforts to diversify beyond its traditional logistics warehouse portfolio while leveraging its growing expertise in power-intensive infrastructure projects.
Management sees data centres as a significant long-term growth opportunity alongside its established position in the UK logistics sector.
Financial and Market Outlook
The company’s outlook continues to be supported by solid operational and financial performance, although weaker free cash flow conversion during 2025 and higher debt levels remain areas of focus.
Technical indicators remain constructive, with the shares maintaining an established upward trend. Valuation metrics also appear supportive, combining a relatively modest earnings multiple with a dividend yield of around 4.6%.
Recent corporate updates have reinforced confidence in the company’s development pipeline and capital allocation strategy, although investors continue to monitor execution risks and the timing of income generation from new projects.
More About Tritax Big Box REIT
Tritax Big Box REIT plc is the UK’s largest listed owner and developer of large-scale logistics warehouses and controls the country’s most extensive logistics-focused land portfolio.
As a member of the FTSE 100, the company invests in strategically located logistics assets and development opportunities designed to generate long-term income and capital growth. In recent years, Tritax has expanded its focus beyond logistics into data centre development, using its “power first” approach to capitalise on rising demand for digital infrastructure across the UK.
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