A £110 million investment facility from Deutsche Bank secured by a 1.9 million square foot logistics portfolio in the East Midlands will also help unlock funds to develop a 58.6 acre logistics scheme in the Golden Triangle.
UK-focused industrial and logistics investor, developer and asset manager Griffen UK has accepted the investment loan secured by its 1.65 million square foot Desford campus and 220,700 warehouse. square feet known as Griffen Park in Milton Keynes.
The portfolio also includes 58.6 acres of adjoining development land in Desford which provides for four logistics units, suitable for single or multi-tenant use, ranging from 103,679 square feet to 508,050 square feet.
Construction of Phase 1, comprising 231,727 square feet over two units, has begun, with practical completion expected in the first quarter of 2023. Using low-carbon construction methods, the highly sustainable program is aiming for BREEAM certification Excellent and an EPC A rating, with features such as photovoltaic panels on the roof and the use of recyclable materials throughout.
Rui Nobre, CEO of Griffen, said, “With big box vacancy rates at record highs, driven by continued e-commerce penetration and relocation needs, the environment for high occupancy levels and future rental growth remains very attractive.In nearly a decade of activity in the sector, we have seen the composition of tenants change, and while high inflation is an almost universal concern, it is matched by growing demand in depth and breadth, far beyond e-commerce retailers.
“Securing an institutional lending partner of the caliber of Deutsche Bank is a strong endorsement of both the business plan for our assets and the compelling structural drivers of the industry, while the competitive terms of the facility are fully aligned with our broader strategy.
The Golden Triangle is the dominant UK market for large-scale retail, with prime industrial rents increasing by 114% in the five years to 2021. The increasingly permanent shift from just supply chain strategies in time to convenience and proximity strategies has compelled companies in every sector to sustain operations to meet consumer demand. According to CBRE, big box takeover in the first half of 2022, at 22.6 million square feet, was 10% higher than the same period last year, which in itself was a record, resulting in a drop in UK vacancy rates to a new low of 1.2%.
Griffen was advised by JLL’s Debt and Structured Finance team.