EXCLUSIVE: Property rivals may work together to deliver East Midlands Gateway scheme
Developer investor heavyweights SEGRO and Prologis are in discussions that include working together to deliver the circa. 5 million ft2 plus East Midlands Gateway 2 scheme in Leicestershire whose DCO application put forward by SEGRO, was accepted by the Planning Inspectorate for examination just last week.
By Liza Helps, Property Editor, Logistics Matters
THE DISCUSSIONS are the result of the fact that Manchester Airport Group (MAG) submitted planning proposals for a 1.5 million ft2 industrial and logistics development on circa.102 acres of land that sits within the overall East Midlands Gateway 2 DCO application zone in 2024 and appointed rival property company Prologis as development partner – reported by Logistics Matters last year.
In effect it has lodged a competing application on land that is part of an overall Nationally Significant Infrastructure Project. NSIPs are not part of the normal planning process and are determined at governmental level, rather than via local planning authorities. The MAG/Prologis scheme is not an NSIP and is being determined at a local planning level.
NSIP’s are required to obtain Development Consent Orders and essentially can be fast tracked through the system precisely because they are nationally significant developments. Should a DCO be granted it can also grant Compulsory Purchase Orders (CPO), allowing the NSIP to go ahead in full.
SEGRO has just started the DCO process – reported exclusively by Logistics Matters last week – and this should be determined by the Secretary of State by the end of 2026 which means that construction could start as soon as Q1 2027. The MAG/Prologis application which is being brought forward as an outline consent is currently going through the planning process. It would need reserved matters planning approval before any construction could begin. Should SEGRO’s DCO be granted it would supercede any application on the entire EMG2 site and any land not already in its control could be subject to a CPO.
According to the DCO documents put before the Planning Inspectorate, SEGRO had been in negotiations with MAG since 2020 to acquire the freehold interest of the land to the extent that it had paid a ‘considerable fee’ for an exclusivity agreement which was signed in August 2022. Negotiations were under way with regards to head of terms for the sale of the land right up until October 2023 when following SEGRO’s announcement that it was considering a DCO application, MAG announced that it ‘would not be selling its land to [SEGRO] but intended to make a planning application for its own land’.
The DCO documents noted that SEGRO tried to reopen discussions in April 2024 and was invited to make an offer for MAG’s freehold interest which was duly made in June 2024 at the same time that MAG submitted an outline planning application to North West Leicestershire Council for the site.
SEGRO countered with a revised offer in August that year but in October it was confirmed that Prologis had acquired the part of the site under MAG’s ownership, the remainder under the ownership of a local family, and was officially the development partner for the site.
The 102-acre plot makes up circa.40% of the 260-acre EMG2 main site and lies south of the East Midlands Airport. The planning application for this site continues to progress. SEGRO contacted Prologis in November 2024 to initiate dialogue.
At the end of January 2025, The Chancellor, Rachel Reeves made a surprise announcement in a speech that MAG and Prologis were spearheading £1 billion of inward investment in the East Midlands Freeport zone which included upgrading the airport and the development of a 1.5 million ft2 industrial, logistic and advanced manufacturing park with the result that in February SEGRO initially sent an email proposing the acquisition of the Prologis interests or alternative arrangements to work together to secure development of the EMG2 Main Site and then followed this up with a meeting to discuss the proposals.
Since this time both parties have been in correspondence to thrash out the deal with a letter being sent in September to Prologis setting out terms for the acquisition of the Prologis interests or alternative arrangements to work together to secure development of the EMG2 Main Site.
When Logistics Matters requested further information and clarification on the negotiations, we were informed that rather than either party individually responding that East Midlands Freeport would respond on their behalf with a statement.
A spokesperson for East Midlands Freeport said: “The site is moving forward through constructive discussions between developers to ensure timely delivery.”
The EMG2 site is one of three within the East Midlands Freeport and the one that is progressing through the DCO process first. Should it be approved it would deliver circa.260 acres of warehouse employment space (3 million ft2 plus 2 million ft2 at mezzanine level), the creation of c.4,000 new jobs and an overall investment of around £325 million into the local area.
