Crosstree Real Estate Partners and Bloom have kicked off a new £200m last-mile, industrial and logistics joint venture by acquiring Fairview Business Centre in Hayes for £30m from A2 Dominion Group.
Constructed in the 1970s and 1980s, the multi-let industrial estate in West London comprises five units offering 106,901 sq ft.
Bloom and Crosstree intend to carry out a comprehensive refurbishment of the estate, which is currently 70% let, improving its EPC rating from D to a targeted A+ rating.
The joint venture between Crosstree and Bloom has been created to invest in under invested assets in supply-constrained sub-markets that can be enhanced to Grade A quality with strong sustainability credentials. The geographical focus of the joint venture will initially be in London and the South East, but will likely expand to regional cities that have similar supply-demand dynamics.
Bloom will manage the Crosstree last-mile joint venture alongside its existing £250m ultra-urban warehouse joint venture with TPG Angelo Gordon.
Liam Singh, managing director at Crosstree Real Estate Partners, said: ”We are thrilled to have partnered with the experienced team at Bloom as we seek to take advantage of the attractive investment environment in the UK last-mile logistics sector which continues to demonstrate highly compelling fundamentals. Fairview Business Centre represents a strong first investment for the venture, and we look forward to bringing forward our plans whilst seeking further similar investment opportunities.”
Tom Davies, co-founder and managing partner of Bloom, added: “We are delighted to partner with Crosstree on this new joint venture which expands our brown-to-green urban logistics strategy, repositioning underinvested properties into modern, fit-for-purpose warehouses, suitable for a diverse customer pool. We believe the current environment provides an excellent buying opportunity, with industrial property values having appeared to have bottomed out and now trending upward, and with investor sentiment having improved, as inflation and the cost of capital have reduced.”
Sam McGirr, co-founder and managing partner of Bloom, said: “Fairview is a fantastic first asset for the joint venture. We have acquired it at below replacement cost. It is superbly located within a large regeneration area, where industrial property is being redeveloped into residential, leading to an undersupply of good quality industrial and logistics space. It is well let with a strong and diverse tenant base but also gives us the opportunity to improve its quality through a refurbishment and installation of sustainable products such as solar panels and EV chargers”.
Bloom was advised by Rothschild & Co on the joint venture equity raise. Bloom and Crosstree were advised by Fidu Property on the acquisition of Fairview Business Centre and A2 Dominion was advised by CBRE.
