Pan-European private equity real estate platform Deutsche Finance International (DFI) has expanded its UK urban logistics and industrial platform, a joint venture with operating partner and co-investor Argo Real Estate, with the acquisition of the Headley Park 10 estate in Reading.
Financial details were not disclosed.
Headley Park 10 is a 24-unit multi-let asset, offering 117,000 ft2 (10,800 m2) of urban logistics and industrial space that is fully occupied by 19 tenants including Toolstation, Screwfix and SFL Group, in units ranging in size from 1,000 to 13,000 ft2 with low site coverage ratio of 30% across the site.
In line with the platform’s strategy, the JV will seek to improve rental income by accessing reversion and undertaking a capex programme to improve EPCs to target an “A” sustainability rating and initiating a net-zero carbon pathway.
Headley Park 10 benefits from a prime location in a supply constrained industrial market with close proximity to central Reading, where it is well placed to serve the needs of the local community. The estate also has excellent transport connectivity via nearby access to the UK’s motorway network.
The Platform, set up in 2023, comprises c. 1 million ft2 of space across 11 assets located in prime, urban logistics and industrial hubs including London, the South East and Manchester (Trafford Park), with a diversified income across 50+ occupiers including blue-chip tenants like Amazon, Royal Mail, GXO Logistics and Greencore.
The portfolio is now fully let and the JV has increased rental income significantly since acquisition last year whilst the capex upgrade programme is progressing well, with net-zero carbon achieved on certain units already.
The JV sold an asset in Weybridge in Q1 this year, delivering strong performance for investors. It will continue to consider individual acquisitions and disposals, whilst building towards a platform exit or recapitalisation in the coming years.
Jonni Glick, vice president at DFI, commented: 'The performance of the platform to date is testament to the JV’s business plan focused on driving income and creating additional value for our investors. The UK urban logistics and industrial sector remains attractive and a high conviction investment strategy for DFI.'
Crispin Gandy, CEO at Argo Real Estate, added: 'We’re delighted with this latest acquisition which complements the existing JV urban industrial portfolio and gives us access to another South East market with excellent underlying fundamentals and potential for strong rental growth.
'We are unlocking great income and capital performance across the portfolio as we intensively manage the assets and invest accretive capex to upgrade the quality and environmental credentials of the properties. With our business plan for this asset already in motion, we look forward to delivering on our performance targets for the property alongside the wider JV portfolio.'
