St. Modwen’s growth plans have been accelerated for its dedicated logistics business with the addition of a £180m portfolio of urban warehouses. The portfolio has been acquired from Argo Real Estate by St. Modwen and shows a commitment to expand its income-generating portfolio and build its presence in Greater London and South East England.
The portfolio will increase St. Modwen’s exposure to urban warehousing and includes seven units in London as well as one in Manchester, totalling 717,000 sq ft of space. All built or substantially renovated in the last ten years, the average unit size is 23,000 sq ft, with a primary purpose as last mile facilities by a blend of sectors.
Through this investment St Modwen, which is owned by funds managed by Blackstone builds on the 900,000 sq ft of logistics space delivered in recent months across five UK logistics parks. Five of those new units are pre-let, feeding into the 72% of the 1.5m sq ft 2021 pipeline that is already pre-let or under offer. St. Modwen has also secured planning permission for more than one million sq ft of space in six locations this year, capitalising on a c. 19m sq ft landbank to deliver big box and urban logistics warehouses.
Polly Troughton, Managing Director at St. Modwen Logistics, said: “We conclude this year with successful delivery across three key areas: building out our pipeline, delivering new warehousing space and growing our income portfolio. This recent transaction boosts our exposure to Greater London and the South East market and leaves us strongly placed for growth in 2022 and beyond. We do all this while focussing firmly on our customers and developing out high-quality logistics parks with sustainability at the heart.”
Argo was an early cycle investor and has built up a significant portfolio of urban industrials, last mile retail warehousing and supermarkets. The sale follows its recent disposal last week of two properties to Supermarket REIT for £73m and acquisition of a city office building for repositioning.
Crispin Gandy, CEO of Argo Real Estate, commented: “We’re delighted with the performance of these assets having achieved strong rent collections and both significant rental and capital growth despite the challenges presented by both Covid and Brexit. We’re looking to reinvest the proceeds and are considering a number of new opportunities”.