UK Urban Logistics Development
Overview
Investment Approach
The strategy takes advantage of the unprecedented occupier and investor demand for logistics real estate. The objective is to deliver a 13-16% Net IRR generated from ‘alpha’ outperformance by development, leasing and sale of properties, using modest leverage.
The strategy, which is the second in Fiera’s Logistics Series, seeks to generate capital growth by acquiring sites in or on the edge of major urban conurbations before obtaining planning permission and developing new small-to-mid size ESG exemplar logistics units (typically <100,000 sq ft) with up to 60% LTC leverage.
Target returns are not guaranteed. Inherent in any investment is the potential for loss.
Key Principles
The strategy is well positioned to capitalise on the continuing structural evolution of occupier demand for logistics based around the following key principles:
Structural Change
Online retail sales and geopolitical events have fundamentally changed UK supply chains.
Market Fundamentals
Land prices have fallen by c.30% from a peak in 2022. Constrained construction starts and the growth in demand for new logistic facilities are expected to drive rental and capital growth.
Deal Flow
Benefiting from access to off-market deals, alongside extensive transactional experience and deep sector knowledge through our unique operating partner network.
Track Record
10 year track record showcasing £2.3bn of logistics development in the UK, totalling over 11.7m sq ft.
Market Themes
Growth
Demand
Market
Returns
Investment strategy is focused on:
- Grade A small to mid-box units – The strategy is to develop <250,000 sq.ft urban logistics schemes with a Grade A specification. Planning, construction and leasing risk are borne by the vehicle.
- Assets located in densely populated areas – The strategy’s assets are located in major metropolitan areas, such as London, Birmingham, and Manchester. Concentrated in locations supported by transport infrastructure and within 45 minute drivetime catchments of >1.0m people.
- Strong ESG credentials – Focus on creating assets with best-in-class ESG credentials to support the transition to a low-carbon economy. All new developments have minimum targets such as BREEAM ‘Excellent’ and EPC ‘A’ ratings.
- Unique access to deal flow – Our operating partner network provides comprehensive geographic coverage of the UK market providing unique access to deal flow.
Fiera Real Estate Logistic’s Sustainable Development Goals (SDGs) commitments
In 2015, all UN Member States adopted the 2030 Agenda for Sustainable Development. Underlying ‘Agenda 30’ are 17 Sustainable Development Goals (SDGs), which address the urgent call to end extreme poverty, fight inequality and injustice and to protect our planet.
The targets we have set for ourselves in order to meet our ESG commitments have been aligned with a number of these SDGs, but we have placed particular focus on the below:
Recent UK Logistics Development Deals
Watford Works,
North-West London
Spark,
Bishop’s Stortford
Urban Crawley,
Crawley
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