Investec Structured Property Finance (“Investec”) announces that it has agreed to provide Valor Real Estate Partners (“Valor”), the pan-European logistics and industrial real estate investor, with a £27 million senior loan, to fund the speculative development of a 153,000 sq ft Grade A urban logistics park in Mitcham, South London.
The 48-month loan, agreed at up to 65% Loan to Cost, will support Valor through the planning, development and stabilisation periods. Valor acquired the site in January 2019 and proposes to redevelop the existing c. 110,000 sq ft estate into modern trade counter and mid box units ranging from 5,000 sq ft to 85,000 sq ft, suitable for a diverse range of occupiers. The site also has the potential to cater to single tenant build-to-suit requirements.
The well-located site benefits from excellent vehicular connectivity to both central London, which is less than nine miles away, and Greater London via the A23 and M25. At the same time, industrial supply is at record lows following conversion to alternative uses, particularly residential, thereby offering significant opportunity to capture rental growth over the medium term.
Since the start of 2018, Investec has significantly increased its loan book exposure to the industrial sector, committing over £160 million across nearly 20 deals alongside both new and existing clients, reflecting the growing demand from domestic and international investors and developers looking to access the favourable yields on offer.
Erin Clarke, at Investec Structured Property Finance, commented: “This is an exciting opportunity for us to partner with a highly experienced logistics investor and developer that has the skills and vision to deliver this project from planning consent through to completion, whilst simultaneously driving competition from a range of occupiers for rental demand.
“The growing appeal of urban logistics has been well-documented as consumer habits have evolved; the rise of e-commerce and increasing demand for same day delivery make sites like this near large cities very attractive.”
Matthew Phillips, Principal at Valor, added: “We are pleased to secure acquisition and development financing for this exciting new industrial development in Mitcham, South London. As London’s industrial supply and demand imbalance continues to grow, this site will provide high specification new product with prime access to the densely populated submarkets.
“Partnering with Investec, a new lender relationship for Valor, validates our strategy and we look forward to working with the team on this scheme. In addition, the financing proceeds provide additional capital for us to deploy into future industrial opportunities in London and other Pan-European urban logistics assets.”
Investec’s Structured Property Finance team has over 25 years’ experience in real estate, with a focus on developing close and exceptional partnerships with clients to provide solutions for deals requiring funding of £5 million upwards. With specialist knowledge across the residential, commercial, mixed-use and student accommodation sectors, Investec’s flexible approach to development and investment funding has delivered consistent loan book growth to an increasingly diverse range of clients.
Source : Company