Investment deal helps unlock Golden triangle scheme

A £110 million investment facility from Deutsche Bank secured against a 1.9 million ft2 logistics portfolio in the East Midlands will also help release funds to develop out a 58.6-acre logistics scheme in the Golden Triangle.

UK-focused industrial and logistics investor, developer, and asset manager, Griffen UK, has agreed the investment loan secured against its 1.65 million ft2 Desford campus and a 220,700ft2 warehouse known as Griffen Park in Milton Keynes.

The portfolio also includes 58.6-acres of adjoining development land at Desford which has planning for four logistics units, suitable for single or multi-tenant use, ranging from 103,679ft2 to 508,050ft2.

Construction of Phase 1, comprising 231,727ft2 across two units, has commenced, with practical completion targeted for Q1 2023. Employing lower carbon construction methods, the highly sustainable scheme is targeting a BREEAM Excellent certification and EPC A rating, with features including rooftop PV panels and the use of recyclable materials throughout.

Rui Nobre, CEO of Griffen, said: “With big box vacancy rates at record lows, driven by continued e-commerce penetration and on-shoring requirements, the environment for continued high levels of occupation and future rental growth remains highly attractive. Over nearly a decade of being active in the sector we have witnessed tenant mixes evolve, and whilst high inflation is a near universal concern, this is offset by an increasing depth and breadth of occupier demand, far beyond e-commerce retailers.

“Securing an institutional lending partner of Deutsche Bank’s calibre is a strong endorsement of both the business plan for our assets and the sector’s compelling structural drivers, whilst the competitive terms of the facility are fully aligned with our wider strategy.”

The Golden Triangle is the UK’s dominant big box market, with prime industrial rents growing 114% in the five years to 2021. The increasingly permanent shift away from just in time to just in case supply chain strategies and near-shoring has forced businesses in every sector to future proof their operations to meet consumer demand. According to CBRE, H1 2022 big box take up, at 22.6 million ft2 was 10% above the same period last year, which was itself a record, resulting in UK vacancy rates falling to a new low of 1.2%.

Griffen was advised by the Debt and Structured Finance Team at JLL.