Investor secures Milton Keynes multi-let industrial site as UK debut
GREYKITE European Real Estate Fund I has entered into a strategic partnership with Martley Capital to build the UK division of its Lagerhome industrial platform in the UK and has made its debut with the acquisition of a 100,000 ft2 multi-let scheme in Milton Keynes.
By Liza Helps, Property Editor, Logistics Matters
THE PROPERTY on Carters Lane at Kiln Farm, Milton Keynes offers the new owner Lagerhome UK ‘an asset management upside that will enable the Fund to capture significant rental reversion’.
The industrial market has seen a plethora of investors move in to the multi-let/urban/last-mile industrial sector in the last 18 months due to the revisionary opportunities it offers over and above that which would normally be found in speculative and build-to-suit development following the dramatic yield shift following the Truss mini budget in September 2022.
With some 80% of multi-let/small/urban industrial stock in the UK below an EPC B Minimum Energy Efficiency Standards (MEES) – present all commercial property in the UK has to reach EPC grade ‘B’ or above in England and Wales by 2030 – there are a lot of properties that require upgrading and significant asset management on this basis alone. There are potentially a lot of facilities that will be sold at a discount for that reason where landlords cannot afford to or perhaps do not have the ability to do these upgrades.
Once refurbished and upgraded these properties can command higher rents over and above that rent growth already seen in the last five years. For a canny investor this means not only asset appreciation but increased rental income as well – a double whammy.
For the occupiers the downside is that rents will increase and considerably but in many cases that is offset by operational savings in terms of energy costs and higher staff morale as the units/facilities become nicer places to work.
The Lagerhome fund is targeting €1 billion of investment in the next 18-24 months in the UK, Swedish and German markets.
GREYKITE Founder and CEO Michael Abel said: “We have strong conviction in the UK industrial sector, where structural undersupply, resilient tenant demand, and supportive long-term fundamentals, coupled with ongoing market dislocation, continues to present compelling investment opportunities.”
