BlackRock Real Assets has completed 4 major lettings as part of its innovative “Build to Hold Logistics” strategy, through its BlackRock UK Property Fund (BUKPF).
The “Build to Hold Logistics” strategy is focused on the development of prime logistics warehouses across the Fund’s extensive land holdings, which can then be held for long term income. Over the last 4 years the Fund has developed 13 prime logistics warehouses (close to 1.5m square feet) on both a pre-let and speculative basis. The Fund has a future pipeline of another 1.5m square feet (sq ft) available for development and will continue building out incrementally, with a focus on risk mitigation and maximisation of returns.
BUKPF is pleased to announce the completion of the following four leases:
- Carbon 207, Middlemarch Business Park, Coventry: Completion of a 10 year lease of a 208,116 sq ft distribution warehouse to Zooplus AG, Europe’s largest online retailer of pet supplies, at a rent of £6.23 per square foot (psf). Stoford acted as BUKPF’s development manager.
- Carbon 103, Middlemarch Business Park, Coventry: Completion of a 15 year lease of a 104,170 sq ft unit to World of Buzz Ltd, a market-leading online retailer of second-hand books and mother media products, at a rent of £6.40 psf. Stoford acted as development manager.
- Alpha Park, Chandlers Ford: Completed a 10 year lease of a 45,000 sq ft unit to Charles Kendall Freight at a record rent of £10 psf. This is the second letting at the 3 unit Alpha Park scheme, which provides a total floor area of 150,000 sf. Bericote acted as development manager.
- Heathrow Logistics Park, London: Completed a 10 year lease of a 34,500 sq ft unit to James Cargo Services Ltd. at a rent of £14.50 psf. Graftongate acted as development manager.
Industrial and logistics are increasingly a focus for both overseas and UK institutional investors, with annual return in 2017 of nearly 20% and £7.5bn traded across the whole sector. The structural shift to e-tailing, or the selling of retail goods on the internet, is set to continue, with ever growing pressure on finding solutions for the fulfilment of sales and returns. This has helped to drive demand and present opportunities for investors that have exposure to prime logistics development sites.
Paul Tebbit, Portfolio Manager of the c. £3.5bn BUKPF said: “We are very pleased with the progress made, and believe that the development of the Fund’s prime logistics land holdings, in key strategic locations, will provide attractive risk adjusted returns for our investors. We look forward to the next phase of logistics development, focused on untapped markets with strong potential for rental growth.”
BlackRock Real Estate is the dedicated real estate investment group within BlackRock Real Assets and invests in strategies across the risk and return spectrum, providing access to all major property types. The business manages over US $22 billion of private and public real estate equity and debt on behalf of investors worldwide in 20 offices across 12 countries in Asia-Pacific, Europe and the US.
 “Shed Hot, Industrial and logistics en vogue”, Lambert Smith Hampton, March 2018, Annual Return Data source: MSCI Data Report, 16 May 2018
 As at 31 December 2017, BlackRock