JV backs urban warehouse refurb programme

By Liza Helps Property Editor Logistics Matters

THE JOINT venture has kicked off with the acquisition of a multi-let industrial estate in west London which will improve its EPC D rating to an A+ rating.

Fairview Business Centre, a prime, highly reversionary multi-let industrial estate in Hayes was bought for £30 million from housing association A2 Dominion Group.  It was built in the 1970s and 1980s, and comprises 106,901 ft2 of space in five units – 70% occupied by four tenants. The estate is highly reversionary, with prime rents in Hayes now around £30 per ft2.  A2 Dominium Group submitted plans to redevelop the whole site for residential in 2019 to provide 398 new homes.

The joint venture has been created to invest in underinvested assets in supply-constrained sub-markets that can be enhanced to grade A quality with enhanced sustainability credentials. The geographical focus will initially be in London and the south east but will likely expand to regional cities that have similarly attractive supply-demand dynamics.

Alongside operational suitability, a key motivator for Bloom is to achieve market-leading and future-proofed ESG credentials, with new schemes targeting BREEAM ‘Excellent’ and EPC ‘A+’ ratings and offering enhanced wellbeing for customers.

Bloom, led by co-founders Sam McGirr and Tom Davies, will manage the Crosstree last mile joint venture alongside its existing £250 million ultra-urban warehouse joint venture with TPG Angelo Gordon, which has invested in seven assets in central London through a mix of refurbishment and ground-up development projects. These include Bloom Brixton a premium industrial estate comprising of five units, from 3,910 to 35,417 ft2. Delivering multi-level warehouse spaces with ancillary offices, all of which are designed with employee wellbeing and ESG credentials in mind.

Bloom co-founder and managing partner Tom Davies, said: “We are delighted to partner with Crosstree on this new joint venture which expands our brown-to-green urban logistics strategy, repositioning underinvested properties into modern, fit-for-purpose warehouses, suitable for a diverse customer pool. We believe the current environment provides an excellent buying opportunity, with industrial property values having appeared to have bottomed out and now trending upward, and with investor sentiment having improved, as inflation and the cost of capital have reduced”.

While, Sam McGirr Bloom’s other co-founder and managing partner, said: “Fairview is a fantastic first asset for the joint venture. We have acquired it at below replacement cost. It is superbly located within a large regeneration area, where industrial property is being redeveloped into residential, leading to an undersupply of good quality industrial and logistics space. It is well let with a strong and diverse tenant base but also gives us the opportunity to improve its quality through a refurbishment and installation of sustainable products such as solar panels and EV chargers”.

Bloom was advised by Rothschild & Co on the joint venture equity raise. Bloom and Crosstree were advised by Fidu Property on the acquisition and A2 Dominion was advised by CBRE.