Panattoni, the largest logistics real estate developer across the UK and Europe, has passed the major landmark of £350 million through three significant acquisitions this year. The first quarter saw Panattoni acquire a prime west London redevelopment site near Heathrow Airport where an 80,000 sq ft unit will be delivered
The nation’s landlords are responding to higher levels of mortgage interest rates by cutting down on their borrowing. The research comes from specialist property lending experts, Octane Capital, which compared the total amount of borrowing amongst buy-to-let landlords between Q3 2022 and Q2 2023 and the corresponding period the year
Harworth Group, a leading property developer and regeneration specialist, has announced its return for the third consecutive year to The UK’s Real Estate Investment & Infrastructure Forum (UKREiiF). The UKREiiF event is in partnership with Pagabo and is set to take place between 21-23 May 2024, in Leeds. The event
In response to the Rightmove Monthly House Price Index, Nathan Emerson CEO Propertymark comments. “A decrease in house prices compared to last year is inevitable, natural and needed in order to get back to sustainable and achievable levels since the drastic spike seen over the past couple of years.“Our own
Boroughs in the capital will need to make over £500m of savings next year to balance their budgets, new analysis from London Councils reveals. Based on its latest survey of council finances, the cross-party group warns that nine in ten London boroughs expect to overspend on their budgets this year
The multi-let industrial sector continues to offer a compelling investment rationale Lismore Real Estate Advisors yesterday released its review of the Scottish investment market for Quarter 3 of 2023. With a number of larger transactions, Q3 was more positive than anticipated, with activity trading at £398m, which is up 17%
South Gyle Trade Park offers investors asset management opportunities and an attractive income profile South Gyle Trade Park has been brought to the market by Lismore Real Estate Advisors for offers in excess of £12.8m, on behalf of abrdn. The quoting price reflects an attractive initial yield of 7.5%. This
Steve Muncaster and Rob Armstrong were appointed as Joint Administrators of Hounslow Property Development Limited on 28 September 2023. Alongside Steven and Rob, Kroll’s Real Estate Advisory Group will be supporting the insolvency process. Hounslow Property Development Company recently acquired an old Ministry of Defence site, Cavalry Barracks, near Heathrow
The future of twelve of the UK’s most historic buildings is to be secured with a £12.2 million investment from the National Lottery Heritage Fund. From Argyll and Cardiff to Belfast and Lowestoft the investment funding will breathe new life into historic spaces, which will be transformed into important assets
Commercial real estate firm CBRE is in talks to acquire leading asset management firm Sovereign Centros, according to reports. Sovereign Centros says it has 12.5 million sq ft of assets under its management, with an additional 4 million sq ft in the pipeline. Its current portfolio includes a number of
BDC 319 : Aug 2024
Panattoni, the largest logistics real estate developer across the UK and Europe, has passed the major landmark of £350 million through three significant acquisitions this year. The first quarter saw Panattoni acquire a prime west London redevelopment site near Heathrow Airport where an 80,000 sq ft unit will be delivered for Q3 2024; the site is called Panattoni Poyle. The start of the third quarter saw the acquisition of a site to deliver 800,000 sq ft in Milton Keynes, where the business will construct two speculative units of 350,000 sq ft and 450,000 sq ft. The end of the third quarter sees the acquisition of a two unit park totalling 626,468 sq ft in Sittingbourne, strategically located to the Southeast of London 4 miles from junction 5 of the M2. The 26-acre site, acquired from Abrdn, will be developed as a state-of-the-art, net zero carbon development. This prime location offers unparalleled access to local and national distribution routes facilitated by the M2, M20, and M25 motorways. The development will provide seamless connectivity to vital markets such as London, the Southeast, and Europe via London Thamesport, Dover, and the Port of Tilbury. The site has planning consent for two distinct units, spanning 439,228 sq ft and 205,320 sq ft, respectively which will be speculatively developed. Construction is due to commence at the end of the fourth quarter of 2023, with a targeted completion date in the fourth quarter of 2024. A key advantage and differentiator of Panattoni Park Sittingbourne are its enhanced environmental, social, and governance (ESG) features; the site has 5MVa of power available with a further capacity of additional 1.35MVa from the solar PV provided as part of the base specification by Panattoni. Furthermore, Panattoni will engineer the construction to achieve a BREEAM sustainability rating of ‘Excellent’ and an Energy Performance Certificate (EPC) rating of ‘A’. Panattoni’s acquisition at Sittingbourne follows its success at the nearby 1.6 million sq ft Panattoni Park Aylesford; the level of demand in the region has resulted in the scheme being 100% pre-let to major national and international occupiers in less than 24 months from acquisition Tony Watkins, Head of Development for the South East and London at Panattoni, said, “This third acquisition in the South in 2023 confirms our success in delivering on a strategy to acquire land that provides value to investors and customers in the current commercial environment. We will continue to selectively purchase key developments that offer value-add opportunities within core markets in London and the South East, where we can drive rental growth”. Finally, he said “we expect to be announcing more acquisitions this quarter”. Panattoni were advised by JLL Abrdn were advised by Avison Young and Savills Building, Design & Construction Magazine | The Choice of Industry Professionals
The nation’s landlords are responding to higher levels of mortgage interest rates by cutting down on their borrowing. The research comes from specialist property lending experts, Octane Capital, which compared the total amount of borrowing amongst buy-to-let landlords between Q3 2022 and Q2 2023 and the corresponding period the year before. It found that buy-to-let landlords reduced their borrowing by around £7 billion over that timespan, from £37.9 billion in 2021-2022 to £30.4 billion in 2022-2023. In terms of a percentage change, this means that buy-to-let landlords collectively reduced their borrowing by -19.8% in just a single year. A period in flux It’s no wonder that landlords have looked to reduce their exposure to the mortgage market, given how the Bank of England base rate has shifted over that period. At the start of December 2021 the base rate stood at 0.1%, while by June 2023 it reached 5.0%. Other unusual events also rocked the markets. In February 2022 Russia would launch its invasion into Ukraine, creating an inflationary effect on the cost of energy, which would filter through to other sectors. Meanwhile September 2022 saw ex-Prime Minister Liz Truss’s ill fated mini-budget, where a selection of uncosted tax cuts served to spook the financial markets, causing mortgage interest rates to surge almost overnight. It’s no wonder that investors have looked to restrain their borrowing in this context. First-time buyers The rest of the market followed a similar trend to buy-to-let, as lending to first-time buyers dropped from £68.1 billion in 2021-2022 to £65.9 billion in 2022-23, a reduction of -3.2%. Meanwhile all other forms of lending fell by -7.6%, from £92.2 billion to £85.2 billion. Remortgage activity rose slightly, from £79.9 billion in 2021-2022 to £81.0 billion in 2022-2023, reflecting how more borrowers consolidated what they had rather than saddling themselves with fresh debt in the form of a new mortgage. CEO of Octane Capital, Jonathan Samuels, commented: “Landlords are taking fewer risks with their borrowing, which makes sense given how the market has become objectively less attractive in the past couple of years. “No longer are buy-to-let mortgages available for 2-3%, so it’s less economically viable to invest in property on a highly leveraged basis. “Now landlords are in a period where they’re adjusting to a new normal, where they need to be strategic and consider using a larger deposit if they want to continue growing their portfolios.” Data tables and sources can be viewed online, here. Building, Design & Construction Magazine | The Choice of Industry Professionals
Harworth Group, a leading property developer and regeneration specialist, has announced its return for the third consecutive year to The UK’s Real Estate Investment & Infrastructure Forum (UKREiiF). The UKREiiF event is in partnership with Pagabo and is set to take place between 21-23 May 2024, in Leeds. The event is expected to bring together industry experts, investors, and key stakeholders from the real estate and infrastructure sectors across the United Kingdom. As one of the UK’s most prominent property developers, Harworth is renowned for its skill in transforming land and property across the country. With a diverse portfolio of projects ranging from strategic land developments to brownfield regeneration, Harworth has played a pivotal role in shaping sustainable communities for the future. UKREiiF provides a unique platform to share insights, engage in networking opportunities, and explore innovative solutions driving the real estate and infrastructure markets forward. Harworth’s participation in the event demonstrates its commitment to fostering growth, promoting sustainable development, and contributing to the transformation of the UK’s built environment. Last year their pavilion proved to be a tremendous success, providing visitors with an immersive experience into Harworth’s impressive projects and sustainable development initiatives. Attendees were able to interact with key team members, gain valuable industry knowledge, and witness first-hand how Harworth is leading the charge in shaping the future of real estate. The third year at UKREiiF allows Harworth to build on the achievements of its previous pavilion and further strengthen its industry relationships. It also offers a prime opportunity for the company to showcase new and exciting developments, discuss investment opportunities, and engage in thought-provoking discussions about the challenges and opportunities facing the sector. Speaking of their involvement, Lynda Shillaw, Chief Executive of Harworth, said: “UKREiiF has become a key event in the Harworth calendar, and a great way for us to engage with a wide array of stakeholders, share ideas and demonstrate the enormous value that Harworth can deliver for communities up and down the country. We are delighted to be returning again in 2024 with an exciting line-up of events in the Harworth pavilion and we look forward to building many more relationships across the real estate industry.” Keith Griffiths, Chief Executive Officer and Founder of UKREiiF, said: “We are delighted to welcome Harworth back UKREiiF for the third year running. Their pavilion last year was a highlight of the event, providing attendees with an insight into their impressive portfolio of projects and sustainable development initiatives. We look forward to seeing how they continue to shape the future of real estate and contribute to the transformation of the UK’s built environment at UKREiiF 2024.” Led by the UK’s leading property events company Built Environment Networking and supported by some of the biggest UK property and infrastructure companies, the third annual UKREiiF event will be held in Leeds on 21-23 May 2024. The forum will attract inward investment, generate economic growth, and drive a more sustainable and inclusive culture within the property and construction industries. For more information, please view the event here: https://www.ukreiif.com/event/ukreiif-2024/ Building, Design & Construction Magazine | The Choice of Industry Professionals
In response to the Rightmove Monthly House Price Index, Nathan Emerson CEO Propertymark comments. “A decrease in house prices compared to last year is inevitable, natural and needed in order to get back to sustainable and achievable levels since the drastic spike seen over the past couple of years.“Our own reports indicate a healthy interest in property with demand and stock levels remaining buoyant, so it is positive that Rightmove reports the same positive trend when compared to pre-pandemic.“We hope that buyers are looking at the market confidently and continue to find an affordable middle ground. It is proving to be a good time to buy and sell.” Building, Design & Construction Magazine | The Choice of Industry Professionals
Boroughs in the capital will need to make over £500m of savings next year to balance their budgets, new analysis from London Councils reveals. Based on its latest survey of council finances, the cross-party group warns that nine in ten London boroughs expect to overspend on their budgets this year – estimated at over £400m in total across the capital [1]. London Councils says boroughs face a perfect storm of prolonged high inflation, fast-increasing demand for services, and insufficient government funding – leading to a growing risk of financial and service failures. Pressures on adult and children’s social care, as well as the capital’s worsening homelessness crisis, are the biggest drivers of boroughs’ overspends. London Councils estimates that almost 170,000 Londoners – equivalent to one in 50 residents of the capital – are currently homeless and living in temporary accommodation arranged by their local authority. Boroughs expect to overspend on temporary accommodation by £90m this year. Ahead of the government’s Autumn Statement in November, where the Chancellor will set out his future spending plans, boroughs are calling for urgent action to boost support for local services and stabilise council finances. London Councils has launched its key priorities for the Autumn Statement, which include: Cllr Claire Holland, Acting Chair of London Councils, said: “Borough finances are on a knife edge – with grim implications for the future of local services in the capital. “The combination of higher costs due to spiralling inflation, skyrocketing demand for services, and insufficient levels of government funding leaves boroughs in an extremely precarious position. The pressure is relentless – we face a £400m shortfall this year, which rises to £500m next year unless the government provides more support. “Councils play a vital role in their communities providing essential services and in tackling so many major challenges, such as addressing homelessness, unlocking economic growth, and making faster progress towards net zero. “The government must use the Autumn Statement to bolster council finances. This will be crucial for helping boroughs stabilise budgets and sustain London’s local services.” London boroughs’ resources remain almost a fifth (18%) lower than in 2010, despite there now being almost 800,000 more Londoners – broadly equivalent to a city the size of Leeds. This has been exacerbated by over £1bn in unfunded or underfunded new burdens over that period, such as the government transferring responsibility to local authorities for financing Council Tax Support and a host of other measures. London Councils also highlights a recent report from the independent Institute for Fiscal Studies think-tank that found London local government funding is 17% lower than its estimated relative need – by far the largest gap of any region in England. London Councils key priorities for Autumn Statement 2023 Download Building, Design & Construction Magazine | The Choice of Industry Professionals
The multi-let industrial sector continues to offer a compelling investment rationale Lismore Real Estate Advisors yesterday released its review of the Scottish investment market for Quarter 3 of 2023. With a number of larger transactions, Q3 was more positive than anticipated, with activity trading at £398m, which is up 17% on Q2 of 2022 and 8% below the five-year average. There is an increase in stock coming to the market and Lismore anticipates that Q4 volumes are likely to be lower than the five-year average. The key transactions in the quarter included the £62.5m (7.8% yield) acquisition of Craigleith Retail Park, in Edinburgh by US investor, Realty Income from Nuveen. Also in the capital, the prime mixed-use block, 40 Princes Street was bought by Remake Asset Management for £29.525 (7.5% yield) from Redevco. Scotland’s largest outlet centre was acquired by Global Mutual and Patron Capital for a price of £57m (14% yield), whilst pension fund manager, Weslayan, acquired a prime industrial asset let to Biffa at Eurocentral from Capreon for £6.74m (6.2% yield). In terms of pricing, the gap between buyers and sellers has started to narrow. Confidence remains elusive but there is an acknowledgement that we are starting to “find a level” where valuers are more comfortable. Logistics and multi-let industrials remain stable, whilst offices remain the hardest sector to call with a real divergence of opinion on future prospects and where true value lies. Retail warehousing looks like offering good value and in the living sector, appetite remains robust, but the number of relevant transactions has been limited. When looking at buyer activity, funds remain selective and quite opportunistic, with core-plus buyers starting to see some value in offices, leisure and retail warehousing where values have fallen to a level that debt can be accretive. Stock selection remains paramount, and the patience shown by opportunistic buyers looks like it will be rewarded in the not too distant future. Chris Macfarlane, Director of Lismore comments: “While there are encouraging signs at a macro-level, with interest rates peaking, inflation easing and build costs plateauing, it still feels like there are some challenges ahead, particularly for those with historic debt, grappling with the prospect of more expensive re-financing. “The market will settle and we are anticipating an improvement in investment volumes, as confidence improves over the next 12 months. The recovery is unlikely to be uniform across all sectors but multi-let industrials seem to have weathered the storm better than others and are well-placed to see improvement. It offers good letting prospects, is less capex hungry and a lack of new development all make for a compelling investment rationale.” Investors expect next year to be a buying opportunity in the multi-let industrial sector Recently Lismore investor research showed that more than two-thirds of respondents will be seeking buying opportunities in the multi-let industrial sector during Q4, with property companies and investment managers, with 69% and 88% being most positive. Over the next 12 months, 46% of respondents expect prime yields in the sector to remain the same, with considerable positive sentiment from investment managers with 56% expecting yields to harden. With prime yields having moved out by 150-200 bps, the sector should provide opportunity for the weight of capital targeting the sector to acquire prime assets offering genuine value. When asked to rank the key drivers of occupational demand, location was identified as the most important by 54% of respondents, with macro-economic sentiment second on 34%. Surprisingly total occupational costs was a distant third on 9%,suggesting there is potential for rental growth to continue its upward trajectory. Only 3% of respondents identified ESG credentials as the key driver, suggesting that sustainability in the multi-let sector is still being driven by landlords. For an expert view on the multi-let industrial sector, Lismore spoke with Will Lutton, Head of Investment, Industrials REIT who said: “We have ambitious growth plans, so portfolio acquisitions will form the lion share of transactions by value. The multi-let industrial sector remains fragmented and we have always seen value in aggregating smaller individual estates along the way and we want to continue to benefit from this. “In the short term, we expect rates to remain high and economic conditions to be uncertain, which may to lead to investment opportunities for well capitalised investors, as others struggle to refinance existing holdings. When the underlying risk free rate starts to come down as central banks get comfortable that inflation is under control and we move into a more normalised debt market, yields are likely to harden. In the short term, we anticipate rates remaining high and uncertain economic conditions to continue which may lead to investment opportunities for well capitalised investors. Chris Macfarlane concludes: “No sector has been immune from the wider macro-economic challenges and the effect that they have had on the market, however, it has not been a uniform slow-down. While the logistics, office and retail markets have seen more significant adjustments, the multi-let industrial sector has fared better. We predict that yields will stabilise into 2024 and investment volumes will increase in the sector as confidence starts to return.” The full Lismore Quarter 3 2023 Review, including Research Findings & Expert Views is available to download from: HERE Building, Design & Construction Magazine | The Choice of Industry Professionals
South Gyle Trade Park offers investors asset management opportunities and an attractive income profile South Gyle Trade Park has been brought to the market by Lismore Real Estate Advisors for offers in excess of £12.8m, on behalf of abrdn. The quoting price reflects an attractive initial yield of 7.5%. This rare and prime multi-let trade park investment is located within Edinburgh’s premier industrial location and offers an attractive income profile, as well as strong asset management opportunities to increase both income and capital value. Set on a site of 12.31 acres, the estate is split into four distinct components, with an overall floor area of 139,650 sq ft. This is set across eighteen terraced and solus trade counter units, three light industrial units and a single office building of 4,172 sq ft. The park also fulfils a “last-mile” function, given its critical location and excellent connectivity, being adjacent to key motorway infrastructure and Edinburgh’s arterial road network. Colin Finlayson, Director of Lismore Real Estate Advisors said: “This is a rare opportunity for investors to acquire a prime trade park asset, ideally placed in within the Edinburgh’s premier trade and light industrial location.” “South Gyle Trade Park offers a secure and well-diversified income profile, as well as significant opportunities to grow income through active asset management. “This asset has great potential and we anticipate strong interest from a wide range of investors.” The park offers an excellent and diverse mix of tenants, with good covenants, including Network Rail, Thistle Timber & Building Supplies, Wolseley, D&G Autocare, Geo Amey, Martin Plant Hire, Dofos and CityFibre. The contracted WAULT is 8.1 years to expiry and 7 years to the nearest breaks. South Gyle and its surrounding area comprise a mix of uses, including trade, light industrial, distribution, business, retail, leisure and residential. Nearby occupiers include G4S, UPS, Royal Mail, Wolseley, Screwfix, Halfords, Speedy Services, Virgin Media, RBS, Lloyds Banking Group, Tesco Bank and Aegon Asset Management. South Gyle Trade Park is situated both north and south of South Gyle Crescent, the principal arterial route through South Gyle Industrial Estate. Lismore Real Estate Advisors is the sole selling agent for South Gyle Trade Park. Building, Design & Construction Magazine | The Choice of Industry Professionals
Steve Muncaster and Rob Armstrong were appointed as Joint Administrators of Hounslow Property Development Limited on 28 September 2023. Alongside Steven and Rob, Kroll’s Real Estate Advisory Group will be supporting the insolvency process. Hounslow Property Development Company recently acquired an old Ministry of Defence site, Cavalry Barracks, near Heathrow with the view to build over 1,600 homes and 2,673 square meters of non-residential floorspace for community and commercial use. At nearly 37 acres, the former Ministry of Defence site is one of the largest remaining undeveloped brownfield sites in London. The original development plan was to refurbish in total 14 Grade II listed buildings and nine locally listed buildings were to be refurbished. Rob Armstrong, Joint Administrator, said “It is clearly a challenging time for companies operating in the real estate sector. We are assessing all the possible options related to this site and the Company as a whole.” Annika Kisby, Managing Director, Kroll’s Real Estate Advisory Group: “This site is one of London’s largest remaining brownfield sites. Cavalry Barracks provides a major opportunity and is significant for a wide range of stakeholders across the capital. Kroll’s real estate team is looking forward to bringing our range of skills to maximise the realisation of the asset.” Building, Design & Construction Magazine | The Choice of Industry Professionals
The future of twelve of the UK’s most historic buildings is to be secured with a £12.2 million investment from the National Lottery Heritage Fund. From Argyll and Cardiff to Belfast and Lowestoft the investment funding will breathe new life into historic spaces, which will be transformed into important assets at the heart of local communities. Five projects have received a combined total of £10.4m in grants and a further £1.8m has been awarded to seven organisations to develop their plans to revitalise heritage. Chief Executive of The National Lottery Heritage Fund, Eilish McGuinness, said: “Saving heritage is core to what we do, and we look forward to seeing these fantastic projects improving the condition and understanding of the important heritage they guard, reducing the amount of ‘heritage at risk’, and delivering transformational projects for communities across the UK.” The five projects receiving heritage grants are: Historic Ice House, Great Yarmouth (£1,968,061) Built between 1851 and 1892, the site was once used to house freshly caught seafood ahead of transportation to London’s Billingsgate fish market. Led by Out There Arts, the site will be brought back to life as a Centre of Excellence in Outdoor Circus and Arts. The Strand Arts Centre, Belfast (£768,069) Led by Belfast City Council and the Strand Arts Centre, Northern Ireland’s oldest cinema will be transformed with our funding. Visitors will step back in time for a ‘living museum’ experience of a pre-war cinema. Victorian market, Cardiff (£2,091,500) The Grade II* listed market in Cardiff’s Castle Cultural Quarter will be restored by Cardiff Council, revitalising its structure and reducing energy costs. The site opened in 1891 and stands on top of the infamous Cardiff Gaol and gallows site. St. John’s Church in Chatham, Kent (£2,318,287) This ‘at risk’ building is set to become a thriving, sustainable Gateway Community Hub. The project, which will also receive £1m from the future High Streets Fund via Medway Council, will revitalise heritage in Chatham for generations to come. Lowestoft Town Hall, Suffolk (£3,257,512) Vacant since 2015, Lowestoft Town Council will restore the Grade II listed building. It will establish a community venue to engage local people, improve residents’ lives and transform the town’s historic heart. The funding is helping organisations develop their projects. Seven more organisations have been awarded development funding to finalise plans for creating community hubs for engagement, education, creativity and wellbeing: • St Conan’s Kirk, Argyll, Scotland (£93,792) • St Collen’s Church, Llangollen, Wales (£94,886) • Alice Billings House, Stratford, Newham, London (£467,172) • Rock Hall Revival, Bolton (£466,662) • Woodoaks Farm, Rickmansworth, Hertfordshire (£201,392) • Ellesmere Yard, Shropshire (£409,993) • Napper Cottage, Guildford – England’s first Cottage Hospital (£58,700) Building, Design & Construction Magazine | The Choice of Industry Professionals
Commercial real estate firm CBRE is in talks to acquire leading asset management firm Sovereign Centros, according to reports. Sovereign Centros says it has 12.5 million sq ft of assets under its management, with an additional 4 million sq ft in the pipeline. Its current portfolio includes a number of shopping centre and retail park assets, including Gateshead’s Metrocentre, Merry Hill Shopping Centre in Dudley, and Basingstoke’s Festival Place. The firm also works with a number of global institutions, pension funds, and public bodies on various town centre projects with partners such as Blackstone, Morgan Stanley, Wells Fargo, and BNP Paribas. It also works with Tesco and Frasers Group. CBRE operates from over 500 offices in more than 100 countries, working across multiple facets of real estate, including investment, planning, design, and portfolio management. The firm was recently appointed as investment advisor for the Greater Manchester Property Venture Fund. Building, Design & Construction Magazine | The Choice of Industry Professionals
