Jaynic and PGIM Real Estate have partnered to develop two logistics units at Suffolk Park, Bury St Edmunds, Suffolk, with a gross development value of £35 million, with a £21.5 million loan facility provided by PGIM Real Estate, acting on behalf of institutional investors. PGIM Real Estate is the real estate investment business of PGIM, the $1 trillion global investment management businesses of U.S.-headquartered Prudential Financial, Inc. (NYSE: PRU).
A £13m contract has been let to Readie Construction Ltd and building of the two units of approximately 147,000 sq ft and 206,000 sq ft respectively, on a 19-acre plot will commence at the beginning of May.
PGIM Real Estate’s loan finances 95% of costs for the site acquisition and development which is expected to complete in November 2018.There is potential for an occupier to commence racking/fit-out about one month earlier.
Forecast rental values are £5.95 per sq ft based on standard FRI lease.
The BREEAM excellent development has 12.5 m clear height, 50m deep service yards, level access and dock loading together with ancillary offices.
Ben Oughton, Development Director with Jaynic, comments “We are delighted to have partnered with PGIM Real Estate for this project. These units will be the only speculative development in this area currently being undertaken. It will provide much needed stock that can be delivered before the end of 2018 setting the scheme apart from other development sites in the vicinity, where lead in and occupation lags by anywhere between 12 – 24 months,” adds Oughton.
Andrew Macland, Managing Director and Head of UK at PGIM Real Estate comments “We are proud to be Jaynic’s funding partner for this scheme as its expertise and track record exemplifies our partner-led investment approach. This well-located site in a currently under-served area for logistics properties will offer our investors access to a strongly performing sector. Jaynic has a strong development pipeline and we are looking forward to establishing a long-term relationship through further projects together.”
Bonnie Minshull, director at Savills, the joint letting agents, says, “I am delighted with the decision to undertake a speculative development at Suffolk Park as it will provide high quality logistics facilities to meet demand from businesses in a region where there is a dearth of supply. We have already received a good level of interest in the units and hope to have the buildings let before practical completion”.
The development is part of a broader initiative with St Edmundsbury Borough Council and housebuilder Taylor Wimpey to support a range of new and existing businesses in the popular Bury St Edmunds area and to continue to create jobs and prosperity.
The infra-structure, including all utilities and the main estate road, and landscaping contracts for Suffolk Park have been let and are due for completion in the next few weeks.
Bury St Edmunds is located in the heart of the eastern region and forms one of the main commercial centres within the strategically important A14 corridor, linking Felixstowe to the Midlands and London via the M11. Junction 45 of the A14, via the recently completed Rougham Tower Avenue, lies just 1.4 miles to the east of the site.
The town is the primary commercial and administrative centre for West Suffolk and boasts a variety of service sector, production and manufacturing occupiers including major national operators such as Sealey, Greene King, British Sugar, DHL, Century Logistics, Treatt, Servest, Mizkan and Taylor Wimpey.
Jaynic has been responsible for the creation of a number of major employment sites in the region including: Cambridge Research Park, Buckingway Business Park, Cambridge, University of Essex Knowledge Gateway, Colchester, Haverhill Business Park and Haverhill Research Park.
Agents are Global Real Estate advisors Savills and local agent Hazells.