Invesco Real Estate has partnered with the UK's Barwood Capital to refurbish and develop some 500,000 ft2 (46,450 m2) of logistics facilities in Birmingham.
The firm has acquired two existing industrial units with a view to extend and refurbish them to meet Grade A institutional standards with best-in-class ESG credentials. It has also acquired the adjacent 6.4 acres vacant site on which additional units will be built.
The acquisitions have been made on behalf of one of Invesco Real Estate’s long-standing, separate account clients. Barwood Capital will act as the development manager on the combined scheme.
The site, situated in the prime industrial sub-market of Birmingham, is located in the Midlands’ prime ‘Golden Triangle’ logistics hub, one of the UK’s main distribution centres catering to the Birmingham, pan-Midlands as well as wider UK markets providing strong rental growth prospects and excellent occupational demand.
The current on-site facilities consist of two freehold warehouse units (constructed in 2015 to then-modern, institutional specification criteria). Currently rated EPC A, additional ESG initiatives will be implemented to improve the overall sustainability credentials with a target to achieve BREEAM ‘Excellent’.
Two additional units ranging from 60,000 ft2 to 90,000 ft2 will also be developed on the adjoining 6.4 acres vacant site.
The UK and European logistics markets have continued to offer compelling investment opportunities on a select basis, and Invesco Real Estate has remained active in the sector.
The firm recently announced it is to develop a Grade A logistics facility at CORE Temnitzpark in Neuruppin, Greater Berlin, also for the same separate account client, and continues to look for additional opportunities across the continent.
Rob Johnston, managing director –UK & Nordics investments at Invesco Real Estate, said: 'Despite the occupational uncertainty of the past two years, the UK remains relatively undersupplied in terms of modern, institutional grade accommodation.
'The acquisition of standing units provides the opportunity to deliver an attractive spread in terms of yield-on-cost vs prime Midlands logistics yields with reduced development exposure.
'In addition, the marriage value from combining the adjacent vacant site will further consolidate this as a prime scheme. Birmingham is at the centre of the highly attractive Midlands economic region and we are excited to work with Barwood Capital on this initiative.'
Jonathon Ellerington, senior investment manager at Barwood, said: 'Given the quality of the existing units, coupled with the excellent opportunity to speculatively develop further in this premier logistics location, we are thrilled to complete these acquisitions and develop this scheme with Invesco Real Estate.
'This is a location with proven occupational demand for sustainable and well-located logistics units and the refurbishment and redevelopment of these sites will serve to improve the area, while providing exceptional industrial space at a time when the market is starved of supply.'
The letting agents are Knight Frank, Colliers and Cushman and Wakefield. Invesco Real Estate were advised on the acquisitions by Knight Frank.
