UK-focused real estate fund manager Moorfield Group and real estate asset management platform Peloton Real Estate have formed a joint venture to invest in open/outdoor storage assets in the UK.
The joint venture plans to aggregate an initial £100m portfolio of open storage assets throughout the UK.
The joint venture has made its first investment with the purchase of an 11.4-acre site in Garston, Liverpool, for £4 million.
The open storage strategy will focus on assembling a geographically and occupationally diverse portfolio of sites, with the aim of generating a secure income profile, whilst adding value through active asset management initiatives.
Moorfield is the majority investor in the JV, on behalf of its Moorfield Real Estate Fund V, with Peloton primarily responsible for identifying acquisitions and operating the portfolio.
The Garston site was formerly an industrial estate that was demolished in preparation for the development of a residential scheme. The area is set to benefit from the commercial growth being witnessed at the nearby Garston Docks, which is owned by Associate British Ports, and other major infrastructure projects in the immediate vicinity of Speke and South Liverpool.
Open storage is a fast-growing real estate sub sector in the UK, with demand being driven by HGV, van and private car parking, recycling, storage of building materials, containers and scaffolding, as well as potential from electric vehicle charging.
Nick Okell, Investment Director at Peloton, commented: “We are very excited to be partnering with Moorfield to bring forward an open storage land strategy. This is a hugely valuable and fast-growing sub-sector of the industrial market and one that is critical to supporting the growth of the economy. We look forward to aggregating a diversified portfolio by location, size and tenant, seeded with this attractive acquisition.”
Chris Perera, Senior Investment Manager at Moorfield, added: “As an established asset manager with multi-sector experience and a UK-wide footprint, Peloton is an ideal fit for us as a strategic partner. Factors including very affordable rental levels and favourable underlying market dynamics, including an acute demand-supply imbalance, make this both a highly defensive and growth asset class. The partnership continues our track record of pioneering institutional investment in less established sectors, which are supported by demographic and technological trends, alongside best-in-class operators.”
David Tyson, Director of Asset Management, commented: “The site is close to major transport infrastructure including Garston Docks and Liverpool John Lennon Airport, as well as a number of major manufacturing companies including JLR and Ford. Open storage land is a scarce commodity, and this acquisition provides a necessary resource to support the expansion of these businesses.”