International real estate firm Hines has entered into a new joint venture partnership with the UK's Chancerygate, an industrial developer and asset manager, to develop a pipeline of last-mile and owner-occupied logistics assets across the country.
The partnership said it had already secured three sites, the details of which will be announced shortly. An initial £100 mln (€112 mln) has been earmarked for investment, with further funding available as opportunities arise.
'While clearly a very competitive market, the e-commerce boom shows no sign of abating and demand for high-quality, well-located warehouse and distribution centres remains strong,' said Ross Blair, senior managing director and head of Hines UK.
'The potential to partner with a developer of Chancerygate’s calibre was very appealing and will help us achieve our ambitions in this space,' Blair added.
'The strength of our combined balance sheets and the speed in which we can make decisions will allow us to grow a pipeline quickly. Chancerygate’s business model of considering both freehold sales in addition to the more traditional leasing route also allows us to appeal to a wide occupier audience.'
The formation of the joint venture follows Hines’ recent senior strategic appointment of Greg Cooper as director of industrial and logistics in the firm’s London office.
Diversification
In recent years Hines has embarked on a strategy of diversification in the UK, initially branching out into the retail sector and then into student accommodation—through its aparto brand and operating platform—to complement its prime UK office portfolio. Globally, Hines has been involved in the industrial sector since 1957 with recent experience in Brazil, Mexico, Poland and the Southwestern US.
'Hines UK continues to evolve as a business, adapting to an ever-changing market and making sure we are best placed to meet investor appetite across a range of asset classes. Our move into retail and student accommodation is testimony to this, and our entry into industrial represents the next chapter of the diversification of our business,' said Blair.
Chancerygate currently has more than two million ft2 (190,000 m2) of space under construction or in the pipeline and said it was seeing continued demand for new Grade A units on both a freehold and leasehold basis. The partnership with Hines will enable it to expand its development pipeline and reaffirms the company’s position as the primary national developer of urban/last mile logistics.
'We are delighted to be working in a true 50/50 partnership with a counterparty such as Hines, which has repeatedly demonstrated its acumen in timing entry into sectors and geographies at the appropriate time. This joint venture will enable us to take Chancerygate to a different level and scope of operation,' said Chancerygate managing director, Richard Bains.
Hines UK has advised on more than four million ft2 of projects acquired, completed or in the pipeline in the UK with a total UK commercial property portfolio under management valued at in excess of £2 bn. The company’s portfolio includes a range of assets under management in London and key regional cities including Manchester, Birmingham, Edinburgh and Glasgow.
