EXCLUSIVE (Updated): DHL secures development land sale with Singaporean REIT

By Liza Helps, Property Editor, Logistics Matters

THIS WILL be the REIT’s first foray into large-scale logistics development in the UK and will see the REIT develop out 1.46 million ft2 of logistics space on the sites in Manton Wood and Towcester in four buildings.

The two plots of land will be acquired from DHL Real Estate (UK) Limited.  The proposed acquisitions are expected to be completed in the third quarter of  2025 with the development of the four properties at Manton Wood and Towcester expected to commence in the first half of 2026 and complete in first half of 2027 and second half of 2028, respectively.  

The total investment cost is estimated to be approximately £203.5 million, which includes approximately £11 million for the plot of land at Manton Wood, and £45.4 million for the plot of land at Towcester with additional development costs and other transaction-related fees and expenses.

The valuation of the plot of land at Manton Wood, on which a single logistics property of 459,403 ft2 would be developed, is £13.3 million, while the valuation of the plot of land at Towcester, on which three logistics properties would be developed, is £47.6 million. The development management fees payable to the Manager are estimated to be £5.5 million.

The first phase of the DHL Manton Wood campus development was sold to Gilco Property last year for £54.5 million representing a net initial yield of 5.21%. Unit 1 is let to DHL on a 20 year lease from 2020 at an initial rent of £5.64 per ft2 with five yearly rent reviews annually compounded at 2% per annum. It was originally forward sold by Commercial property Partners  to an investor known as Alpha for £67,000,000 reflecting a net initial yeild of 4.38%.

CapitaLand Ascendas REIT has stated in a note to Logistics Matters that “there is no sale and leaseback agreement for CapitaLand Ascendas REIT’s first UK logistics developments.”

However, of the three buildings set to be developed on the Towcester site, one was presumed to have been earmarked for DHL as a regional depot as set out in the original planning proposals for the 79.26-acre site on the edge of Towcester put forward by DHL in 2021 which were subject to Appeal earlier this year.

West Northamptonshire Council’s appeal cost circa £170,000 and had their rejection of the scheme been upheld by the Planning Inspector, this would have been reimbursed.

The hybrid application sought detailed planning for an initial 250,000 ft2 BREEAM Excellent distribution centre, presumed to be for DHL, as well as land for a new home for Towcester Town Football Club. 

Additional outline planning was sought for a further 1 million ft2 of space for warehousing and distribution, which would support up to 1,300 full time equivalent jobs and provide a £50 million a year GDV. The scheme is expected to reach practical completion in the second half of 2028.

All the buildings will seek to achieve BREEAM Excellent and EPCA ratings. The buildings will feature 15 to 18 metre eaves, ample trailer parking, good floor loading capacity and deep yards for operational efficiency.

CapitaLand Ascendas REIT Management Chief Executive Officer, William Tay said: “Embarking on our inaugural logistics developments in the UK marks a significant step forward in our strategy to scale up CLAR’s UK logistics portfolio.

“With positive structural drivers such as e-commerce and onshoring anticipated to sustain demand, these four new properties are set to boost the asset value of CLAR’s UK logistics portfolio by 43.5% to approximately S$1.2 billion.

“Adding these best-in-class and green-certified logistics properties enhances CLAR’s logistics portfolio in the East Midlands, a key market in the UK’s logistics heartlands, and capitalise on occupiers’ demand for high-quality and well-located space.”

Developer Panattoni is working with the REIT to bring froward the developments at both Manton Wood and Towcester going forward. The Manager intends to finance the Total Investment Cost through a combination of internal resources and/or existing debt facilities.