£50m+ SPECULATIVE FUNDING DEAL

Date: 15 September 2022
310,000 sq ft logistics development to be delivered at Omega Business Park in Warrington
Miller Developments funding deal
What: M2 Group, the owner of Miller Developments, has secured a circa £50m forward funding deal at Omega Park

Why: Barings, on behalf of its pan-European logistics venture, is backing the development of 310,000 sq ft hub

What next: Investment manager is continuing to deploy capital into UK market while others have taken a step back

Miller Developments has locked in a £51m funding deal with Barings for a speculative logistics development in the North West, React News can reveal.

Barings, which has continued to deploy capital into the UK’s logistics market through the summer, has agreed a funding package for a circa 310,000 sq ft

hub at Miller Development’s Omega Business Park in Warrington.

At 575 acres, Omega is the North West’s largest mixed-use development site, with industrial occupiers including Brakes, Asda, The Hut Group, Royal Mail, Amazon, Evri (Hermes Parcelnet), Travis Perkins, Gousto and Iceland.

“Where we feel assets are priced accurately and offer real potential for us to bring out further value, we will explore them accordingly”

DARREN HUTCHINSON, BARINGS

Delivery next year

After starting construction this month of unit 2, Miller Developments will deliver the BREEAM Excellent building in August next year. Barings is funding the deal from its pan-European logistics venture, PELV.

Miller Developments, the trading name for M2 Group, is continuing to work up an array of projects at its £1bn Omega Park. Another logistics building – the 400,000 sq ft unit 4 – is next up for development, and M2 Group has secured a series of prelets to Lidl, McDonalds and Costa for a mixed-use component at the huge project.

Last month, Bellway Homes bought 13.5 acres at Omega Park.

David Milloy, managing director of Miller Developments, said: “We look forward to working with the Barings team as we move into the construction phase.

“Notwithstanding difficult market conditions, Barings’ decision to fund unit 2 speculatively is testament to Omega being viewed as the premier business park of its type in the North West. The building will be constructed to a very high specification and I am sure it will be of interest to a wide range of occupiers.”

Busy Barings

In July investment manager Barings completed one of the standout logistics deals of the summer, purchasing a portfolio of prime logistics assets from NFU Mutual for £234m.

The 1.5m sq ft platform was purchased as part of a pan-European strategy to acquire core real estate.

Darren Hutchinson, managing director and head of UK real estate transactions at Barings, said: “We continue to be prudent in our approach, seeking only exceptional assets in prime locations at a compelling price. For firms like Barings where we have the investment to secure strong deals as well as the on- the-ground expertise and global insights required to identify them, we believe there are selective opportunities at play in this market.

“Where we feel assets are priced accurately and offer real potential for us to bring out further value, we will explore them accordingly. This site at Omega West is one such opportunity and is an excellent addition to our portfolio.”

“This forward-funding deal is a clear example of how we are approaching the market right now: uncompromising in price, location and quality of asset”

GUNTHER DEUTSCH, BARINGS

Gunther Deutsch, managing director and head of European real estate transactions at Barings, said: “This forward-funding deal is a clear example of how we are approaching the market right now: uncompromising in price, location and quality of asset.

“While the circumstances are challenging, and developers and investors are correctly reviewing how they deploy their capital, we will continue to explore how we can make the most of opportunities in our preferred sectors, including logistics as well as residential and prime offices, across our target markets of the UK, Nordics, France, Spain, Germany, Italy and the Netherlands.”

JLL advised Miller Developments on the funding deal.

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© 2023 M2 Group Ltd
Registered in Scotland
SC601917