M&G Real Estate, one of the UK’s largest property investors, is to fund the construction of three Grade ‘A’ distribution warehouses totalling 575,000 sq ft at Imperial Park, Siskin Parkway West in Coventry. The total commitment is £50.5 million, representing a net initial yield of six per cent.
M&G Real Estate will acquire the 29-acre site, adjacent to Coventry Airport, subject to detailed planning permission, and will fund the development, which will be by Rigby Group with Evander Properties Ltd acting as development manager.
Imperial Park is strategically located just south of Coventry, approximately six miles from Junction 2 of the M6, a region where the logistics sector has seen rents steadily increase over the past year.
Upon completion, the site will comprise three new units of 350,000 sq ft, 165,000 sq ft and 60,000 sq ft respectively, satisfying occupier requirements for high quality and well located warehouses with competitive accessibility to the UK’s regions and major cities.
Paul Crosbie, Head of Logistics and Industrial at M&G Real Estate, comments: “The demand/supply dynamic for Grade ‘A’ industrial space in the West Midlands remains compelling. Coventry benefits from an excellent and improving road network enabling efficient delivery times; together with a skilled and flexible local labour force which make it a favoured location for a variety of different occupiers. The units will be designed to achieve a BREEAM rating of ‘Very Good’ and an EPC ‘A’ rating.
“This investment fulfils our objective of creating core real estate in prime locations which will benefit from rental growth over the long term. This transaction enhances our existing £2.3 billion exposure to the sector and follows other speculative developments at Optimus Point, Leicester and Logistics North in Bolton. Together with Coventry, this will comprise almost 1.4 million sq ft of prime logistics assets to be completed over the next 15 months. M&G Real Estate is committed to investment for long term growth across the UK.”
Andrew Cox, of the real estate division of the Rigby Group, says: “This is a prime location in the centre of the country and at the heart of the road network, so is ideally placed – and this news underlines those qualities.
“There is very strong interest in the units and we believe we will be satisfying a considerable demand for this type of development.
“We have outline permission and expect that detailed consent will be granted in July 2016 and that work will start soon after.”
M&G is a part of Prudential plc, which has over £500 billion of assets under management and is one of the largest providers of long-term finance in the UK, including more than £50 billion invested in UK infrastructure and property across a range of sectors.
FSP and MWRE acted on behalf of M&G Real Estate, Colliers acted for Rigby Group