International investment firm Oryx Real Estate Partners has made its first UK logistics investment with the acquisition of a 20,234 sqm logistics site in Milton Keynes.
Pembury Real Estate will act as development partner for the project, which has an estimated development value of between c. €28.7m and €34.4m.
The acquisition was undertaken on behalf of Middle Eastern clients of Oryx, including Saudi Arabian family offices, and highlights growing appetite for UK real estate from the region, given its attractive pricing, occupier demand trends and stable income producing qualities. The region’s dollar-based investors also benefit from a stronger currency position and wealth growth underpinned by robust domestic economies.
The site located c. 3km from the A5, one of the UK’s major arterial routes, has been acquired from distribution firm WH Barley, which is vacating the building. Oryx, together with logistics development specialist Pembury Real Estate, will bring forward a new c. 10,219m2 speculative urban logistics unit which is targeting a BREAAM Excellent and EPC A rating, with sustainability features including EV charging points and rainwater harvesting on site. A planning application has been submitted.
Fawaz Sulaiman AlRajhi, Chairman of Oryx, added: “After a period of being active in the logistics market, we exited our positions in 2020. Following the correction in land values over the past years and the continued potential of rental growth we believe it is an opportune time to re-enter the market. We value the UK real estate market highly due to its landlord-friendly legislation, longstanding international interest and with attractive opportunities arising due to liquidity requirements and growing distress. This sentiment is shared by our clients, and we look forward to continuing serving them across strategies and risk profiles.”
Johan Eriksson, Managing Partner at Oryx, commented: “This acquisition is a deep value play in one of our core investment theses with compelling fundamentals, complimenting the income generation and value-add strategies we are also pursuing on behalf of our investors. Increased interest rates and economic headwinds have led to a decline in speculative development for logistics units which means that state-of-the-art, sustainable warehouse product suitable for a range of tenants will continue to command rental growth as operators commit to expanding distribution networks and nearshoring operations. Looking at our pipeline, we expect the near future to be busy given the opportunities available across various UK regions and real estate sectors.”
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