Ed Morgan comments in Property Week on a £50m brown-to-green urban logistics deal

A 214,004 sq ft multi-let industrial estate has been acquired for £50 million, showcasing a growing trend in brown-to-green urban logistics strategies. The Merlin Centre at Cressex Business Park in High Wycombe, Buckinghamshire, has been acquired by ARGO Real Estate and Blue Coast Capital. The estate contains 12 fully let units, and reflects how multi-let estates in key locations are attracting investors who seek secure, long-term and risk-adjusted returns.

Indeed, as the 2030 Minimum Energy Efficiency Standards (MEES) deadline approaches, this deal is indicative of a wider trend in the market. Core institutional investors are increasingly taking the opportunity to sell 'brown' assets like this to specialist operators such as ARGO, partially because of the benefits of repositioning and refurbishing these assets into ESG-compliant 'green' stock which can command significant rental premiums from occupiers seeking net-zero credentials.

Ed Morgan, Partner in our Corporate team, comments in Property Week:

Once repositioned, these assets become highly attractive to core investors seeking long-term, stabilised green income. ARGO’s strategy with Blue Coast Capital further reflects the shift toward the refurbishment of existing assets over speculative ground-up development.

The income-producing nature of these assets offers a reduced risk profile regarding both construction costs and post-build vacancy. We anticipate a continued rise in these ‘brown-to-green’ platform deals as clients increasingly prioritise sustainable, urban logistics portfolios.

Read the article in full in Property Week here (subscription required).