Panattoni Europe, one of Europe’s largest logistics companies, is preparing to enter the UK logistics market for the first time with the takeover of Warwick-based First Industrial.
The development focused group will work with First Industrial as a delivery partner on development sites in the UK moving forwards. The new company will be called First Panattoni.
The company has raised a first phase capital facility of £300m to spend on new land purchases and speculative development in the UK.
Panattoni has developed more than 4m sq m of space in Europe since its launch in 2005 and has more than 2m sq m of space under asset management.
It has its headquarters in Poland, plus offices in the Czech Republic, Luxembourg, Germany, Romania and the Netherlands and is run by chief executive Robert Dobrzycki. It is the European branch of the Panattoni Development Company, founded in the US in 1986 by Carl Panattoni. The US business has a worldwide portfolio of 18.5m sq m of space.
Dobrzycki said: “our customers and capital partners have been urging us for some time now to move to the UK, however, in the last few years we have been concentrating on volume in mainland Europe. Having established Panattoni as one the largest industrial developers in Europe, our focus now is on building a UK business, so we can provide our clients an integrated pan-European platform with best-in-class development expertise.”
Dudley Mitchell, director of the Panattoni Development Corporation added: “The UK market has many similarities to a number of territories we successfully operate in. Limited land supply and a slow permitting process means that land is expensive. To penetrate these capital intensive markets, you need to bid aggressively and spec build. We see the UK market with potential for 3,000,000 sq. ft of new build product a year, but we’ll need to up scale the First Panattoni platform to meet these demands.”
Panattoni Europe has long-standing relationships with clients including Amazon, Nestlé, H&M, Unilver and Kelloggs for which it has purpose-built logistics assets across the Continent.
Its takeover of First Industrial will give the developer a delivery partner as well as instant access to the UK market.
First Industrial, founded in 2009 and based in Warwick, specialises in bespoke and build-to-rent industrial developments. It usually works alongside funds as a development partner, and does not own or buy land.
It is presently working with Barwood Property 2015, a five-year fund by Barwood Capital, on a 100,075 sq ft industrial warehouse development in Walsall Road, north of Birmingham city centre.
It is also working on a new bespoke national logistics hub for Stanley Black & Decker at Brackmill Industrial Estate in Northamptonshire. The development comprises 235,000 sq ft of warehouse space and 18,000 sq ft of office space.
These projects will be completed and First Industrial will then work with Panattoni Europe.
Matthew Byrom, managing director of First Panattoni added: “We’ve never been afraid of advancing into new and competitive markets; with recent global uncertainties and the relative weakness of the pound, many of Panattoni’s capital partners will see this as a buying opportunity. From an international perspective, the UK still remains a hugely attractive place to invest in real estate, with its long leases and strong balance sheet customers. Couple this with the rental growth we’ve seen across the country, and the continued growth of the e-commerce phenomenon, the interest in this sector is likely to continue.”
A market source said: “Space in the UK is pretty congested, but as a large organisation with the skill set that it has in Europe it makes sense for them to have a UK presence.
“The UK market is currently showing attributes which much of the other markets don’t as there is an acute shortage of stock, and strong rental growth at the moment, so in that respect it is a good time for a development-focused company, but it can be long going through planning. Land is harder to acquire than in Europe, so they are wise to have a partner.”
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