Pictet Alternative Advisors and Marchmont Investment Management Acquire £30m Development Site

Pictet Alternative Advisors and Marchmont Investment Management have acquired a £30m development site for their £200m programmatic partnership focussed on UK Last-Mile logistics.

A 10-acre + logistics site in Manor Royal, Crawley, has been acquired by the new joint venture (JV) between Pictet Alternative Advisors (PAA) and Marchmont Investment Management. A short-term sale and leaseback has been agreed with Virgin Atlantic Airways Ltd, after which the JV will deliver a best-in-class logistics scheme.

This deal marks the closing of the fifth acquisition for the PAA / Marchmont “Last-Mile” Logistics Venture. The Venture is assembling a portfolio of urban industrial assets throughout London and the South East and intends to deploy more than £200 million into the “Last-Mile” strategy.

This purchase follows a flurry of deals for Marchmont including the acquisitions of four single and multi-let estates around Greater London and the South East.

This Venture seeks to capitalise on the growing demand for small cap, urban industrial assets driven by the strength of the e-commerce and third party logistics markets and the impact this growth places on traditional urban industrial occupiers. PAA’s partner, Marchmont, is an urban industrial specialist, acting as the Venture’s dedicated operating partner to originate, execute and asset manage individual assets.

Marchmont and PAA agreed to buy the freehold for Virgin Atlantic’s training centre in Crawley, for around £30m. The training hub measures around 220,000 sq ft, on a 10.4-acre site. It was sold subject to a short-term leaseback. The site, which fronts Fleming Way, will be redeveloped to provide up to 225,000 sq ft of logistics space.

Charlie Baigler, Head of Acquisitions, Real Estate at Pictet Alternative Advisors, said: “We believe there is significant opportunity for value creation in the UK urban logistics and industrial space, despite the economic headwinds. The demand drivers, which are principally fuelled by e-commerce penetration, combined with the dwindling supply, particularly in the South East should maintain upward pressure on rents. To successfully execute this strategy, a high quality, sector specialist JV partner is needed, which is exactly what we have with Marchmont.”

Cam Fraser, Director at Marchmont, said: “We are delighted to have completed on the purchase of this prime development opportunity as part of our strategic drive with Pictet Alternative Advisors to build a £200m+ portfolio of core UK logistics assets. We see Crawley as a key South East market with an under-supply of Grade A quality mid-box units. Marchmont have been very active in the urban industrial space to date and we view this programmatic partnership with Pictet Alternative Advisors as the next, exciting step in the evolution of our business. PAA share our conviction of the fundamentals of this strategy and to partner with an investor of this pedigree is a great partnership.”