UK Powerhouse Industrial Portfolio

Formation of aggregated portfolio of multi-let industrial assets

The backdrop

In 2014, InfraRed identified the industrial sector as a growth area due to supply shortage, increasing urbanisation, and the emergence of online retail with its demand for last mile delivery sites.

We designed a portfolio aggregation strategy to make the most of this potential, selecting underlying properties for their diversified incomes, tenant bases and multiple opportunities to enhance value.

The portfolio was created with three off-market acquisitions of UK portfolios between 2014 and 2016.

4.5m sqft

Warehousing and workspace

£20m

Headline rent

40

Assets

UK Powerhouse 1
UK Powerhouse 2

The challenges

At the time of purchase in 2013, the buildings were in a poor condition, suffering from low occupancy and weak rents.

Creating Real Value

InfraRed began to add significant value to the portfolios from day one through an intensive asset management approach: optimising the tenant mix, leasing vacant space, and adding on developments.

In addition to these add-ons, we used a capital expenditure budget of £7m to refurbish, rebrand and upgrade numerous assets.

The result was a 25% increase in income, from around £16m to circa £20m, on a portfolio comprising 4.5m sqft of industrial space across 40 assets.

All were located near large economic conurbations such as Manchester, Liverpool, Newcastle and Birmingham, serving over 300 occupiers from industries including logistics, food, agriculture, consumer servicing and retail.

With the UK industrial market continuing to see increased investor interest, we successfully disposed of the Northern Powerhouse Portfolio in early 2018 in a transaction worth over £315m.

"InfraRed has successfully invested in and managed industrial assets since the mid-1990s. Creating the right environment for our tenants to grow their business is a critical component of this success." James Cooper
Director, Real Estate