Investec provides £27m senior loan to fund park development

Michael Lloyd

June 20, 2019

Investec Structured Property Finance (Investec) will provide real estate investor Valor Real Estate Partners (Valor) with a £27m senior loan, to fund the speculative development of a park in South London.

The 48-month loan, agreed at up to 65% loan-to-cost, will support Valor through the planning, development and stabilisation periods for the 153,000 sq ft Grade A urban logistics park in Mitcham, South London.

Erin Clarke, at Investec Structured Property Finance, said: “This is an exciting opportunity for us to partner with a highly experienced logistics investor and developer that has the skills and vision to deliver this project from planning consent through to completion, whilst simultaneously driving competition from a range of occupiers for rental demand.

“The growing appeal of urban logistics has been well-documented as consumer habits have evolved; the rise of e-commerce and increasing demand for same day delivery make sites like this near large cities very attractive.”

Matthew Phillips, principal at Valor, added: “We are pleased to secure acquisition and development financing for this exciting new industrial development in Mitcham, South London.

“As London’s industrial supply and demand imbalance continues to grow, this site will provide high specification new product with prime access to the densely populated submarkets.

“Partnering with Investec, a new lender relationship for Valor, validates our strategy and we look forward to working with the team on this scheme.

“In addition, the financing proceeds provide additional capital for us to deploy into future industrial opportunities in London and other Pan-European urban logistics assets.”

Valor acquired the site in January 2019 and proposes to redevelop the existing c. 110,000 sq ft estate into modern trade counter and mid box units ranging from 5,000 sq ft to 85,000 sq ft, suitable for a diverse range of occupiers.

The site also has the potential to cater to single tenant build-to-suit requirements.

The well-located site benefits from excellent vehicular connectivity to both central London, which is less than nine miles away, and Greater London via the A23 and M25.

At the same time, industrial supply is at record lows so offers significant opportunity to capture rental growth over the medium term.

Since the start of 2018, Investec has increased its loan book exposure to the industrial sector, committing over £160m across nearly 20 deals alongside both new and existing clients.


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