Barings has signed a forward-funding deal for the development of a Grade A logistics asset in Omega Business Park, in the northwest of England, UK.
The site has planning permission for a 308,905 sq ft prime warehouse that will be built to a high specification, including an EPC A certification, electric vehicle charging, and photovoltaic panels on the roof, and will target leading ESG credentials, including BREEAM Excellent.
Omega Business Park is in a prime logistics location between Manchester and Liverpool in Warrington, Cheshire, offering direct access to both the M62 and M8 motorways.
According to Barings, the logistics market in the northwest of England is one of the best performing in the UK and is experiencing strong rental growth due to lack of supply.
Omega Business Park is the northwest’s largest mixed-use development site, extending to 575 acres, with industrial occupiers including Brakes, Asda, The Hut Group,Royal Mail, Amazon, Evri (Hermes Parcelnet), Travis Perkins,Gousto, and Iceland.
The deal closely follows Barings’ agreement to acquire a portfolio of eight logistics assets from NFU Mutual, including a 129,000ft² timber frame modular factory let to Countryside Properties at the nearby Gemini Business Park in Warrington, on behalf of a separate strategy to acquire core European property.
Darren Hutchinson, Managing Director and Head of UK Real Estate Transactions at Barings, said: “We continue to be prudent in our approach, seeking only exceptional assets in prime locations at a compelling price. For firms like Barings where we have the investment to secure strong deals as well as the on-the-ground expertise and global insights required to identify them, we believe there are selective opportunities at play in this market. Where we feel assets are priced accurately and offer real potential for us to bring out further value, we will explore them accordingly. This site at Omega West is one such opportunity and is an excellent addition to our portfolio.”
Gunther Deutsch, Managing Director and Head of European Real Estate Transactions at Barings, said: “This forward-funding deal is a clear example of how we are approaching the market right now: uncompromising in price, location and quality of asset. While the circumstances are challenging, and developers and investors are correctly reviewing how they deploy their capital, we will continue to explore how we can make the most of opportunities in our preferred sectors, including logistics as well as residential and prime offices, across our target markets of the UK, Nordics, France, Spain, Germany, Italy and the Netherlands.”
David Milloy, managing director, Miller Developments, said: “We look forward to working with the Barings team as we move into the construction phase. Notwithstanding difficult market conditions, Barings’ decision to fund unit 2 speculatively is testament to Omega being viewed as the premier business park of its type in the North West. The building will be constructed to a very high specification and I am sure it will be of interest to a wide range of occupiers.”