Crosstree Real Estate Partners, the London-based private real estate investment firm, and Bloom, the urban industrial investor and developer, have kicked off a new £200 mln (€239 mln) last-mile, industrial and logistics joint venture with the acquisition of a multi-let industrial estate in west London.
The joint venture has been created to invest in underinvested assets in supply-constrained sub-markets that can be enhanced to grade A quality with enhanced sustainability credentials. The geographical focus will initially be in London and the south east, but will likely expand to regional cities that have similarly attractive supply-demand dynamics.
The first investment is Fairview Business Centre, a prime, highly reversionary multi-let industrial estate in Hayes that has been acquired for £30 mln from A2 Dominion Group.
Constructed in the 1970s and 1980s, the estate comprises 106,901 ft2 (9,931 m2) of industrial space across five units, and is 70% occupied by four tenants, including Ford Retail and Direct Link Worldwide. The estate is highly reversionary, with prime rents in Hayes now around £30/ft2. Bloom and Crosstree intend to carry out a comprehensive refurbishment of the entire estate and improve its EPC rating from D to a targeted A+ rating.
Hayes is a well-established industrial centre with strong connectivity to central London, Heathrow Airport and across the UK and has experienced considerable recent large-scale development, particularly residential, fuelled by the opening of the Elizabeth Line at Hayes & Harlington Station, which is a five minute walk from the estate.
Bloom, led by co-founders Sam McGirr and Tom Davies, will manage the Crosstree last mile joint venture alongside its existing £250 mln ultra-urban warehouse joint venture with TPG Angelo Gordon, which has invested in seven assets in central London through a mix of refurbishment and ground-up development projects.
Liam Singh, managing director at Crosstree Real Estate Partners, said: 'We are thrilled to have partnered with the experienced team at Bloom as we seek to take advantage of the attractive investment environment in the UK last-mile logistics sector which continues to demonstrate highly compelling fundamentals.
'Fairview Business Centre represents a strong first investment for the venture, and we look forward to bringing forward our plans whilst seeking further similar investment opportunities.'
Tom Davies, co-founder and managing partner of Bloom, said: 'We are delighted to partner with Crosstree on this new joint venture which expands our brown-to-green urban logistics strategy, repositioning underinvested properties into modern, fit-for-purpose warehouses, suitable for a diverse customer pool.'
Sam McGirr, co-founder and managing partner of Bloom, said: 'Fairview is a fantastic first asset for the joint venture. We have acquired it at below replacement cost. It is superbly located within a large regeneration area, where industrial property is being redeveloped into residential, leading to an undersupply of good quality industrial and logistics space.
'It is well let with a strong and diverse tenant base but also gives us the opportunity to improve its quality through a refurbishment and installation of sustainable products such as solar panels and EV chargers.'
Bloom was advised by Rothschild & Co on the joint venture equity raise. Bloom and Crosstree were advised by Fidu Property on the acquisition and A2 Dominion was advised by CBRE.
