Deutsche Bank issues £110m loan for UK logistics portfolio

The German lender is backing Griffen UK as occupier demand in the big box sector grows.

Deutsche Bank has provided a £110 million (€131 million) loan to Griffen UK, the industrial and logistics investor, developer and asset manager.

The five-year facility is secured against a 1.9 million-square-foot, two-asset UK logistics portfolio. Both schemes occupy prime distribution locations in the UK’s so-called ‘golden logistics triangle’ – a 289-square-mile area in the West Midlands that is within a four-hour drive of 90 percent of the British population.

Prime industrial rents in the golden triangle grew 114 percent in the five years to 2021, according to real estate adviser JLL.

The fully occupied portfolio comprises Desford Campus, which covers three logistics warehouses totalling 1,651,229 square feet, and is located seven miles west of Leicester and Griffen Park, a 220,700 square feet single tenant logistics warehouse in Milton Keynes.

Big box logistics take-up is benefiting as occupiers adopt just-in-case supply chain strategies, which keep large standing inventory in order to fulfil a sudden increase in demand. Take up was 22.6 million square feet across the UK during the first six months of 2022 – 10 percent higher than the same period last year, according to CBRE.

Rui Nobre, CEO of Griffen, said: “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.”

Nobre added that inflation was being offset by an increasing depth and breadth of occupier demand that was going “far beyond e-commerce retailers”.

Griffen was advised by the debt and structured finance team at JLL.