Growth Fund IV Update - H2 2023

Project Updates

Maple Cross – Speculative Industrial Development

The Fund acquired this 8.4-acre freehold site adjacent to junction 17 of the M25 for £16.75m (£2.0m per acre) in August 2020 in a 40:60 joint venture with the Merseyside Pension Fund (“MPF”).

Since acquisition there have been two planning applications, with planning permission secured in April 2022 following a second appeal made on the grounds of non-determination.

The business plan is being progressed to speculatively develop a single phase 178,000 sq ft of industrial warehousing (GEA) across two units of 98,000 sq ft and 80,000 sq ft respectively.

The units are being developed to a Grade A institutional standard with a minimum BREEAM target of Very Good. This is currently being reviewed to target an Excellent rating and Net Zero in Operation in line with Barwood’s Sustainability Policy.

Sheffield – Industrial Repositioning

The freehold acquisition of this former B&Q retail warehouse was concluded in September 2020 at a price of £5.5m (£500k per acre), with Tungsten acting as development manager.

The site comprised an existing single warehouse of 110,000 sq ft across 11-acres, with a low density of just 25%, providing the opportunity for further development through densification.

Planning was obtained in 2021 for a total of 188,850 sq ft with practical completion across all phases achieved at the end of March 2023. The development includes open plan offices to a Grade A specification and a BREEAM rating of Very Good, and EPC ratings of A and B for the new build and refurbished units respectively.

Over the last 12 months leases have been granted to Paragon Customer Communications (110,000 sq ft), Wolseley UK (11,000 sq ft), Costa for the drive-thru, Formula 1 Auto Centres, Auto Windscreens and HFD Limited.  In each case the rents were at or above the forecast ERVs. 

Ellesmere Port – Industrial Asset Management

The freehold acquisition of a 470,000 sq ft logistics warehouse at Ellesmere Port let to Jaguar Land Rover (JLR) with 18 months unexpired on the lease at the time of purchase.

The 85:15 joint venture purchase for £24m (£55 per sq ft) with Clearbell Property Partners was completed in January 2021, and part funded with debt from DRC Capital. 

The lease renewal completed in April 2023 for a five-year term at £2.6m per annum (£6.00 per sq ft), which was 40% ahead of the passing rent and 14% ahead of the original business plan ERV.

Firth Way, Nottingham – Speculative Industrial Development

The Fund completed the off-market unconditional purchase of this 17-acre site in September 2021 for £9.15m (£540k per acre), considered to be below market value.

The property is located close to junction 26 of the M1 and five miles to the north-west of Nottingham. Planning consent was secured in September 2022. 

Winvic Construction has now delivered the development reaching practical completion in December 2023 and achieving BREEAM Excellent, Net Zero in Construction and Net Zero Enabled.

Occupier demand continues to focus on the key fundamentals of labour, accessibility, power and quality of product. This aligns with our strategy of delivering a prime sustainable scheme. In the East Midlands market alone, we have seen almost 1 million sq ft of leasing transactions across three buildings in the past three months. CEF have taken 388k sq ft at Magna Park Lutterworth, Clowes & NFU have leased 278k sq ft at EMDC and ERGO/Cole Waterhouse have leased 330k sq ft at Newcastle Under Lyme.

Explore, Richmond - Office Repositioning

This 32,774 sq ft office building in the centre of Richmond, south-west London, was acquired for £12.9m (£393 per sq ft) in December 2021 with the benefit of vacant possession.

An extensive and sustainable ‘back-to-frame’ refurbishment is being undertaken with an additional 4th floor and roof terrace, increasing the total floor area to 41,535 sq ft. The scheme is targeting BREEAM Excellent, EPC A, WiredScore Gold and Fitwell 2-Star. There is scope for BREEAM Outstanding to be achieved but this will not be determined until after practical completion. The strategy is to create the best office space in Richmond, which continues to see post-Covid occupational growth, and create a prime, sustainable, and well-let investment asset