Mon, 25 Apr 2022 | COMMERCIAL PROPERTY
Real estate specialist Valor has completed the acquisition of a 250,000 sq ft last-mile logistics site in Birmingham in an off-market deal valued at £50 million. Valor says that the acquisition is part of its acquisitive growth strategy, while the deal comes amid a wider increase in logistics M&A and attempts by businesses to optimise their supply chains.
Valor is aiming to double its UK portfolio and, having amassed a predominantly London-based portfolio valued at around £1 billion, is targeting sites that help it to expand its presence in select regional cities across the UK. The core cities are Birmingham, which the company views as the UK’s dominant metropolitan hub, Leeds and Manchester.
Like much of the UK, the logistics market in Birmingham has a lack of available warehouse space, resulting in record rental and capital growth. According to Savills, annual rental growth is expected to stand at 10 per cent this year. The growing importance of well-located logistics and delivery hubs saw investment across the wider Midlands area reach £3.1 billion last year, compared to the previous high of £1.6 billion in 2020.
The latest acquisition, Valor’s second in Birmingham after buying the 51k sq ft Oscar House in September 2021, is located on the Hub industrial and distribution park. The site is a single-tenant unit currently let on a long-term lease to KitchenCraft, for whom it serves as UK headquarters.
Commenting on the acquisition, Valor’s Vice President of Investments Jeremy Achkar said: “Birmingham and its 3.6 million inhabitants is one of our key regional UK conviction calls, reflecting the acute shortage of available space within suitable proximity to the city centre alongside its growing population and focus of the government’s Levelling Up agenda.”
“This transaction is the latest demonstration of our forensic approach to sourcing and originating and offers an attractive mix of strong day one income, with the opportunity to significantly improve the rental tone over the medium term. It represents our second purchase in a City we aim to increase our footprint in significantly over the coming years.”
Read our latest report on mergers and acquisitions in the logistics sector
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