Investors have agreed a multi-million pound forward funding deal for ‘one of the most advanced logistics buildings in the UK’ set to be occupied by a global business.
Aberdeen Standard Investments will forward fund the 361,000 sq ft pre-let logistics centre at Logic Leeds for an undisclosed sum.
Developer Muse claims the multi-million pound transaction is one of the biggest ever industrial property deals in Leeds in terms of value.
The news comes as a new RICS report shows that demand for industrial property in Yorkshire increased during the last quarter of 2018.
Thirty two per cent of the region’s commercial property surveyors reported a rise in occupier demand for industrial property (up from 24 per cent in the third quarter), according to the quarterly RICS UK Commercial Property Market Survey.
However, surveyors in the region also reported a lack of availability.
Rent expectations for industrial space are positive, with 65 per cent of respondents expecting to see rents for prime industrial units increase during the year ahead.
Industrial assets continued to attract investor interest in the last quarter of the year.
Demand for offices also increased but interest in the region’s available retail premises continued to fall, driven by changing shopping habits and political uncertainty, according to the survey.
Graeme Haigh, of Bramleys in Huddersfield, said: “The first signs of Brexit caution have been witnessed in the last three months. This has however failed to dampen prices particularly for freehold industrial property which continue to grow.
“Other sectors have seen lengthening marketing periods. The preference to buy, rather than rent, remains and the frustration at the lack of available stock continues.”
Tarrant Parson, RICS economist, added: “The industrial sector, which is a clear beneficiary of the shift towards online shopping, continues to attract solid demand growth from both investors and occupiers across all parts of the UK.”
James Scott, inset, development director at Muse Developments, said ASI’s forward funding deal and letting confirmed the demand for industrial space in Leeds.
“The sales of the John Lewis customer distribution hub to Axa and the Premier Farnell warehouse to Aberdeen Standard Investments has put Logic Leeds on the map and we look forward to further building on the scheme’s success with this new distribution centre,” he said.
He added: “We have worked very closely with the tenant and ASI to deliver this pre-let development. Once operational, the building will represent one of the most advanced logistics buildings in the UK.”
Construction of the new building will begin in February 2019 and will take about 12 months to complete.
Graham Foxton, investment partner with global property consultancy Knight Frank in Leeds, who represented Muse, said: “This is one of the most significant industrial property deals in Yorkshire during the past 12 months and a tribute to Logic Leeds. It is superb news for the region that such a high-profile global occupier has chosen Logic Leeds as a base and that a forward-funding deal is already in place.
“Logic Leeds is a huge success story. The high quality of its buildings, its superb location at the hub of Yorkshire’s excellent motorway network and the incentives offered by enterprise zone status are a winning combination.”