Real Estate Capital
Valor secures loan for expansion in London’s lastmile logistics market
13 December 2023
US manager BGO has issued a five-year facility of £64m in one of its ‘high conviction’ logistics markets.
Industrial property owner Valor Real Estate Partners has secured its third debt facility since September, for the development of its last-mile logistics portfolio in London.
US manager BGO provided the £64 million (€74 million) refinancing facility to the urban logistics developer for a 216,000-square-foot sustainable last-mile logistics estate in Beckton, East London.
The five-year loan will enable Valor to refinance the original acquisition of the 10-acre site and develop four self-contained logistics units ranging from 27,000 square feet to 80,000 square feet.
The loan represents the first debt deal between BGO and Valor. BGO is also the second new lender the logistics investor has scooped this month as it expands in the UK capital.
The development, which is due to complete in Q4 2024, is targeting a BREEAM ‘Excellent’ certification and will incorporate high-efficiency LED lighting, roof-mounted solar panels, occupancy sensors, air-sourced heat pumps, electric vehicle charging points and cycle storage facilities.
Valor assembled the estate via two off-market acquisitions from separate owners and received planning consent for the development earlier this year. It is located on one of East London’s arterial roads, with a population of 2.66 million accessible within a 30-minute drive and London’s main business districts the City and Canary Wharf both within 20 minutes.
BGO managing director Martin Sheridan said the deal marked the lender’s continuation of its “high conviction” strategy for the UK and European logistics markets.
Intense competition
Rising demand for same-day delivery is creating opportunities for last-mile logistics investors in densely populated locations, and in London competition for assets is intensifying due to a high proportion of industrial land being diverted to residential development, according to Valor.
The London-headquartered company, which owns 11 million square feet of logistics assets in the UK, France and Germany, has amassed a portfolio in East London of more than 2 million square feet since 2016. Its focus on Beckton is on account of it being one of London’s most supply-constrained urban logistics locations, Valor said, where industrial vacancy is around 2 percent.
Valor told Real Estate Capital Europe that it is already seeing strong demand for the units ahead of construction starting.
BGO is not the only North American lender Valor has tapped for its London activity in recent months. On 5 December, Canada Life, the subsidiary of Canadian life assurance company Great-West Lifeco, issued a £101 million five-year investment facility to Valor at a loan-to-value of 50 percent. The loan is secured against five recently acquired urban infill logistics properties
located in London, including the Tera 40 industrial estate in Greenford, West London – a property occupied by tenants Tesco and Royal Mail, among others.
In September, US investment manager PGIM Real Estate refinanced 11 of Valor’s assets in the Greater London area, understood to be around £80 million.
Valor was advised by Simmons & Simmons, Ogier, Town Legal, Montagu Evans, Quod and Lockton. BGO was advised by Goodwin Procter, Hollis, Savills and PwC.