Griffen secures £110 million investment facility from Deutsche Bank

By Bridging Loan Directory 2nd August 2022

Griffen UK (“Griffen”), the UK-focused industrial and logistics investor, developer and asset manager, has agreed a £110 million investment loan from Deutsche Bank, secured against a 1.9 million sq ft, two-asset UK logistics portfolio.

The five-year facility will support Griffen’s delivery of its business plan across the two fully let schemes, which occupy prime distribution locations within the UK’s logistics Golden Triangle:

Desford Campus, comprising three logistics warehouses totalling 1,651,229 sq ft seven miles west of Leicester
Griffen Park, a Grade-A 220,700 sq ft single tenant logistics warehouse in Milton Keynes delivered by Griffen’s in-house development team in 2019

Griffen’s UK portfolio also includes 58.6 acres of adjoining development land at Desford.

Acquired in 2020, unanimous planning permission has been secured for four logistics units, suitable for single or multi-tenant use, ranging from 103,679 sq ft to 508,050 sq ft.

Employing lower carbon construction methods, the highly sustainable scheme is targeting a BREEAM Excellent certification and EPC A rating, with features including rooftop PV panels and the use of recyclable materials throughout.

Construction of Phase 1, comprising 231,727 sq ft across two units, has commenced, with practical completion targeted for Q1 2023.

Rui Nobre, CEO of Griffen, commented:

“With big box vacancy rates at record lows, driven by continued e-commerce penetration and onshoring requirements, the environment for continued high levels of occupation and future rental growth remains highly attractive.

Over nearly a decade of being active in the sector we have witnessed tenant mixes evolve, and whilst high inflation is a near universal concern, this is offset by an increasing depth and breadth of occupier demand, far beyond e-commerce retailers.

Securing an institutional lending partner of Deutsche Bank’s calibre is a strong endorsement of both the business plan for our assets and the sector’s compelling structural drivers, whilst the competitive terms of the facility are fully aligned with our wider strategy.

We have signficant ambitions to deliver a sustainable platform that meets the demand of today’s occupier.”

Sarah Gater, Deutsche Bank, added:

“We are very pleased to have had the opportunity to provide this facility to Griffen UK, who we look forward to building a long-term partnership with.”

The Golden Triangle is the UK’s dominant big box market, with prime industrial rents growing 114% in the five years to 2021.

The increasingly permanent shift away from just in time to just in case supply chain strategies and nearshoring has forced businesses in every sector to future proof their operations to meet consumer demand.

According to CBRE, H1 2022 big box take up, at 22.6 million sq ft, was 10 per cent above the same period last year, which was itself a record, resulting in UK vacancy rates falling to a new low of 1.2 per cent.

Griffen was advised by the Debt and Structured Finance Team at JLL.