Fortwell Capital has provided Tungsten Properties with €25.4m (£23m) of funding, enabling the development of a 290,000ft², seven-unit industrial scheme in Witney, Oxfordshire of which two units, accounting for 147,000ft², are pre-let. The loan represents the second tranche of a €55.3m (£50m) revolving credit facility which Fortwell agreed with Tungsten Properties in March this year and will be used to finance the development of Tungsten Properties’ €205.7m (£186m) logistics development pipeline, amounting to 1.6 million ft² of high-quality industrial space across the UK. The facility is now over 50% deployed, having been seeded by an initial €4.8m (£4.4m) tranche to fund the development of Tungsten Park Witham in Essex, a 40,000ft², three-unit industrial and logistics scheme.
Nikos Yerolemou, associate director, Fortwell Capital, commented: “Although the last few months have brought industry-wide uncertainty, we have remained committed to working with our existing borrowers to ensure progress can be made across their projects. Tungsten Properties is well placed to navigate recent headwinds given that market demand for Grade A mid-box industrial space will only grow as a result of accelerated consumer shifts in retail. We expect take-up in the sector to remain strong and, with over 50% of the Witney scheme pre-let, are confident that it will succeed, especially given the shortage of high-quality warehouse space in the area.”
Jeff Penman, managing director, Tungsten Properties said: “With Fortwell Capital as our funding partners, together we fundamentally believe that the logistics sector is the safest place right now for new property investment to build new space to meet demand and create jobs. The sector has proved its resilience through no change in rents or initial yields, despite the Covid-19 pandemic. The pace of structural change from high street retail to e-commerce has been accelerated by Covid-19 by circa 19% of total retail sales in February to 31% in May. This increase would normally take five or so years to reach this outcome. This increase will turn into a demand for millions of new ft² of floor space from businesses and may even strengthen rents and yields."