Henry Boot’s property investment and development arm Henry Boot Developments (HBD) has announced a new joint venture (JV) with Feldberg Capital to establish a UK-focused industrial and logistics (I&L) platform called Origin.
This JV aims to develop next-generation, ESG-compliant I&L assets across the UK, predominantly targeting the mid-box market.
Origin is launching with robust financial backing and an initial portfolio of three sites from HBD's pipeline, boasting a combined gross development value (GDV) of approximately £100m ($126.15m), with HBD's share being £25m.
HBD holds a 25% stake in the joint venture, while Feldberg Capital controls the remaining 75%.
As the development manager, HBD will earn fees for its services while Feldberg will serve as the investment manager.
Both parties have the opportunity to earn a promote fee based on the internal rate of return of the joint venture, contingent on surpassing certain hurdle rates.
The initial sites are poised to offer around 450,000ft² of prime I&L space, with construction set to begin in the first half of 2025 and completion expected in the second half of 2025.
These developments will strive for leading ESG credentials, targeting BREEAM 'Excellent' and an EPC 'A' rating.
The seed assets include Spark in Walsall, a 13-acre development site with a £53m GDV; Inter in Welwyn Garden City, a three-acre site with a £27m GDV; and Ark in Markham Vale, a nine-acre site with a £19m GDV.
These sites have full or detailed planning consent and are part of HBD's strategic development pipeline.
Looking ahead, Origin will leverage HBD's development pipeline and acquire additional sites for further pre-let and speculative I&L development. Development finance for each project will be secured from external lenders.
Feldberg Capital managing partner David Turner said: “Having held back from the industrial and logistics market while assets looked overpriced, we believe now is a highly attractive entry point, with land values having come down over the last 24 months and entry yields being at more sustainable levels.
“The positive tailwinds within the sector remain, driven by structural trends, including the continued growth of e-commerce and more firms serving the UK market looking to ‘onshore’ their production here in the face of a shifting regulatory and geopolitical backdrop. Our aim is for Origin to become a market leader in the mid-box space.
“We’re excited to be working together with HBD, using our tried-and-tested ESG framework to deliver the next generation of units for modern, environmentally responsible occupiers, and driving strong risk-adjusted returns for our investors in the process.”
Subject to market conditions, the partnership aspires to deliver approximately £1bn worth of high-quality I&L schemes across the UK over the next seven years.
HBD retains the right to co-invest in future projects, maintaining the same ownership split as the seed portfolio while continuing in its role as the development manager.
