Friday, February 9, 2018

News: Property deal for Rotherham biomass plant

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A former Rotherham Council depot has been acquired for £3.4m, a year after it was taken on by Stobart Biomass Products.

The subsidiary of the Stobart Group created a waste wood processing plant at the Greasbrough Road depot after it signed a 20 year contract to supply waste wood to the nearby renewable energy plant at Templeborough.

LXi REIT plc, an investor in UK commercial property assets, has now acquired the freehold interest in the Stobart biomass storage and processing plant in a sale and leaseback transaction.

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Stobart has a new 20-year lease in place and with the purchase price for the property at £3.4m, this reflects a net initial yield of 6.2%.

The acquisition is being funded using the proceeds of the LXi REIT's new 11.5-year loan facility secured from Scottish Widows in December 2017 at a fixed rate of 2.85% per annum.

John White, partner of LXi REIT Advisors Limited, said: "We are pleased to have acquired, off-market, the Stobart biomass storage and processing facility, which provides the Company with an attractive net initial yield and secure, long-dated, inflation-linked income stream. The property is underpinned by a strong industrial location and residual value and further diversifies the Company's tenant and sector exposure."

Planning permission for Stobart's site states that it is permitted to accept a maximum of 150,000 tonnes of waste per year and operators will use dust control and mitigation measures regarding the storage and processing of materials where shredders will be capable of processing between 40 – 80 tonnes of mixed wood per hour.

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The Brite Partnership secured planning permission in 2010 for a biomass development at the Firth Rixson Ickles Works at Templeborough where land and disused buildings where purchased in March 2011.

Copenhagen Infrastructure Partners (CI) acquired 100% of the project for £150m and created Templeborough Biomass Power Plant Limited to take the development forward.

Set to generate 41MW of energy, more than the nearby biomass plant at Blackburn Meadows, the plant requires 40 lorry loads of waste wood chip every day to generate the amount of power it is hoping to achieve.

Stobart Biomass Products website
LXi REIT website

Images: Stobart

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