InfraRed Urban Logistics Income Fund completes off-market acquisition

St Helens, Merseyside
Category Real Estate / UK


Matthew Thomlinson / Jesse Mathews

Tel: +44 20 7096 3181


E-commerce driven scheme adds to diversified portfolio of assets serving key urban centres

InfraRed Capital Partners Limited (“InfraRed”), on behalf of the InfraRed Urban Logistics Income Fund (“IULIF”), has completed the off-market acquisition of a 162,000 sq ft multi-let scheme at Mere Grange, St Helens, from Network Space for £17.6m reflecting a net initial yield of 5.50%.

The asset comprises six brand new units in an established industrial submarket located within a short drivetime of both Manchester and Liverpool. Construction of the estate finished in 2019 and was completed to a high specification, with the scheme also offering a market-leading power supply to occupiers. The asset benefits from a weighted average lease length of more than 14 years and is currently let to five occupiers including a major international e-commerce retailer listed on the NYSE. 43% of the income is subject to index-linked rental increases.

Dean Harrison, Investment Director at InfraRed Capital Partners, commented:

“The asset’s proximity to Liverpool and Manchester and direct motorway access to the M62 positions it well for last mile delivery and urban servicing. The recent letting to a global e-commerce retailer is evidence of the asset’s attractiveness for such occupiers. The accelerated shift  to e-commerce during recent months has increased demand for modern, high-quality urban logistics assets.  We are looking to expand our urban logistic holdings in the UK and Western Europe throughout 2020 and beyond; with substantial capital available for deployment.”

The acquisition marks the latest purchase for IULIF, which targets high-quality urban logistics assets located within a 20-minute drivetime of the UK’s top 10 city centres. The Fund is looking to capitalise on the growing imbalance between occupational supply and tenant demand for urban logistics assets, which is being driven by the rapid growth of e-commerce and ongoing urbanisation. The Fund expects these trends to result in income outperformance over the medium term in those assets best positioned to satisfy occupier demand.

Henry Giles, Portfolio Director for the InfraRed Urban Logistics Income Fund, added:

“We are pleased to have added another high quality asset to the portfolio which further strengthens its income characteristics. The off-market acquisition significantly enhances the portfolio’s WAULT, increases its exposure to index-linked rental increases and benefits overall income distribution to investors; as well as lowering the average building age of the portfolio assets. The purchase is strongly aligned to the Fund strategy and well positioned for future performance”

DTRE, Dentons and Malcolm Hollis acted for InfraRed.

Network Space will continue to provide management services for the asset.

About InfraRed Capital Partners

InfraRed Capital Partners is a global investment manager focused on infrastructure and real estate. It operates worldwide from offices in Sydney, London, Hong Kong, New York, Seoul and Mexico City. With around 190 professionals, it manages US$12bn of equity capital in multiple private and listed funds, primarily for institutional investors across the globe. InfraRed Capital Partners is authorised and regulated in the UK by the Financial Conduct Authority.

About Network Space

Operating across the Northern Powerhouse region, Network Space is a commercial property developer, investor and manager specialising in the industrial warehouse sector. Founded in 1982, Network Space has created and modernised over 10 million sq ft of industrial warehouse property in over 150 locations. The company’s vision is to provide the best and most complete industrial workspace solution for all of its stakeholder partners, whether they are a tenant, investor or government body. Their secured land bank could deliver 2.5 million sq ft of new industrial property with a value of over £200m over the next five years.

Letting agents for the scheme are CBRE and B8 Real Estate whilst investment advice in respect of the sale was provided by B8 Real Estate.