M&G’s Real Estate finance team (M&G) announces c. €238m of prime refinancing deals in the retail warehousing and logistics sectors, capitalising on resilient tenant and investor demand against a backdrop of constrained supply in core markets.
M&G is providing a c. €59.5m construction loan (72.5% LTV) to PineBridge Benson Elliot for the ongoing development of two prime logistics assets in Woodford and Enfield, north London. Both sites have received planning consent for seven warehouse units, which will target strong environmental credentials to deliver c. 16,258m2 of prime speculative space, with practical completion expected within 18 months.
London continues to face supply constraints, with vacancy rates for Grade A logistics space currently at 5%, translating to robust tenant and investor demand for high-quality assets built to the latest market standards. Nationwide, industrial asset values are up nearly 1% over the past year.
In a separate deal, M&G is providing Metrobox – an urban retail warehousing joint venture between Delancey and Tritax – with a 53% LTV loan of c. €178.5m to refinance its existing debt facility secured against four prime urban retail warehouses in Guildford, Crawley, Luton and Solihull. Amongst the top performing retail warehouse parks in the country for footfall, tenant demand and proximity to affluent areas, they are fully let to a strong mix of tenants including Next, B&Q, Halfords, Marks & Spencer, Argos, Sports Direct, Pets at Home and B&M. Vacancy rates in the retail warehousing sector are currently at circa 4.6% across the country, with the 4.4% vacancy rate in July of this year the lowest level recorded since 2017³.
Both deals demonstrate M&G’s ability to originate large loans without the need to syndicate financing packages with other third party lenders. The assets these loans are secured against also reflects the company’s real estate underwriting expertise, which focuses on investment-grade assets underpinned by positive credit profiles and growth prospects.
Dan Riches, Head of Real Estate Finance at M&G Real Estate, commented: “We are committed to financing prime logistics and retail warehousing assets in strategic locations in the UK and Europe which meet the evolving needs of modern businesses. Growth in manufacturing and e-commerce are driving demand for Grade A logistics space, and our focus remains on supporting this uptick in sentiment through investments on behalf of our clients that are secured against well-located assets.”
George MacKinnon, Managing Director of PineBridge, added: “PineBridge is delighted to have completed this financing with M&G, enabling the development of two high quality, sustainable urban logistics assets in core central London sub-markets where they are much needed to satisfy the needs of modern occupiers. We look forward to working with the M&G team in delivering the assets.”
A spokesperson at MetroBox, said: “Despite the refinancing exercise being undertaken during an uncertain time in the debt market, we were pleased to see significant interest from lenders. It has been great to work with the team at M&G who provided competitive terms. This deal stems from the high quality of the assets and the asset management successes of Delancey and Tritax on our MetroBox JV.”
Written by Leon Goldwater for Europe Real Estate.
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