Global real estate investor Oxford Properties Group and industrial specialist Logistics Capital Partners (LCP) have formed a new co-investment joint venture to acquire a 734-acre (297 ha) site near Birmingham.
The JV will invest £1 bn (€1.2 bn) to develop the site into a major new logistics hub with associated rail freight terminal known as West Midlands Interchange.
The site was acquired from the shareholders of Four Ashes, a three-way partnership including Kilbride Holdings and Grosvenor Group’s Indirect Investment business.
In a phased investment, Oxford will provide the bulk of the capital, while LCP will act as development manager. West Midlands Interchange will be a technologically advanced and environmentally sustainable development which meets modern occupiers’ efficient operational and environmental requirements, according to the JV.
James Boadle, head of logistics and residential, Europe at Oxford, commented: 'In recent years we have significantly increased our exposure to the logistics sector globally through several major transactions, including making our first direct investment into European logistics last year with LCP.
'Logistics remains one of our highest conviction calls globally, benefitting from substantial undersupply of prime new space while the growth of e-commerce and demand for expedited supply chains continues unabated, accelerated by the effects of Covid-19.'
Planning consent has already been secured by the vendors, which allows for the delivery of around 8 million ft2 (740,000 ft2) of logistics space and provides flexibility around the project timeline and scale of units. Infrastructure works are expected to commence in the first half of next year with the first buildings starting on site in 2022 ready for occupation in 2023.
The site can accommodate new warehouses ranging in size from 200,000 ft2 to over 1 million ft2, with building heights up to 30 metres.
John Pagdin, head of LCP UK, said: 'We have been tracking this particular site for some time and are delighted to have secured the park alongside Oxford Properties.
'West Midlands Interchange is a fantastic opportunity to build out a uniquely positioned development scheme, allowing us to offer occupiers every possible size, scale, configuration and specification of unit with none of the usual planning delays or uncertainties often associated with schemes of this nature.
'We look forward to progressing first stage preparatory works and welcoming occupiers to this exciting project.'
Sustainability is integrated in the site’s masterplan, which includes the creation and maintenance of two new country parks of a combined 109 acres. In addition, the project will create a new strategic rail freight interchange, which will provide intermodal access for occupiers.
In 2020, Oxford announced its intention to deploy £3 bn of capital in the European logistics sector over the next five years in platforms, developments and portfolios of scale. The company made its first direct European investment in 2020, with the acquisition of a 15-acre site in Heathrow alongside LCP.
Concluded Boadle: 'The transaction represents a rare opportunity to gain significant exposure at attractive risk-adjusted returns in an increasingly competitive landscape.
'We are pleased to be again working alongside LCP’s highly experienced and professional team as we deliver a best-in-class logistics park with occupier demand, technological advancements and environmental, social and governance principles at its core.'
