Hines Pan-European Core Fund acquires three logistics warehouses near Heathrow Airport
International real estate firm Hines, has acquired a prime logistics park beside Heathrow Airport on behalf of the Hines Pan-European Core Fund (HECF). The asset was purchased from Aberdeen Standard Investments for GBP80 million.
Developed in 2013, the Dnata City site comprises three logistical warehouses that provide state of the art secure air cargo campus facilities. The 19,418 square-metre complex is located just south of the airport’s southern perimeter boundary and is occupied by Dnata, Heathrow’s dominant cargo operator.
Heathrow Airport is the busiest airport in Europe by passenger traffic and a critical part of the UK’s trade infrastructure. Some 95 per cent of the global economy is within reach of a direct flight from Heathrow. Heathrow Airport has ambitious expansion plans to double its cargo capacity and become one of Europe’s biggest cargo airports, and a stated aim of increasing cargo tonnage to 4m tonnes per annum by 2040. Whilst the majority of the Heathrow logistics market is dedicated to serving the airport, it also forms part of West London’s wider distribution infrastructure including other sub-markets at Park Royal, Feltham, and Poyle.
Since 2019, HECF has sought to increase exposure to urban logistics assets in key European cities with strong long-term growth prospects. The Heathrow acquisition represents the fourth urban logistics investment by HECF, and the third in Greater London, over the last 18 months.
The HECF was recently recognised as one of the top property funds in Europe, achieving the MSCI European Property Investment Award for the best performing pan-European balanced fund.
Peter Epping, Senior Managing Director and HECF Fund Manager at Hines, says: “The Dnata City site offers excellent proximity to Heathrow. Given the heavily supply-constrained location, we see strong long-term prospects for this prime asset beside one of Europe’s busiest airports, which will be a critical part of the UK’s travel and logistics infrastructure beyond the pandemic. This latest acquisition continues our strategy of leveraging our European platform and aggregating an urban logistics portfolio for HECF in European cities with the strongest long-term growth prospects.”
Greg Cooper, Director of Industrials and Logistics at Hines UK, says: “The Heathrow logistics market boasts defensive characteristics of restricted supply, limited new development opportunities and an acute shortage of Grade A fit-for-purpose accommodation. Dnata City provides some of the most modern cargo facilities within the cargo zone and critically is three-five minutes from the main airport cargo gate. The property is truly critical infrastructure and we look forward to working with Dnata going forward.”
Nick Smith, Fund Manager, AIPUT, says: "In a near zero interest rate environment, coupled with a drive to own and build resilient global supply chain networks, the investment market for the best critical infrastructure and industrial property has never been stronger. This sale is in line with our strategy to adjust the AIPUT portfolio to facilitate new investment opportunities presented in the post-Covid, post-Brexit world, and leverage the economic recovery when it comes. We will redeploy the proceeds into strategic airport locations with the strongest potential to generate value, including those within our portfolio where we will secure higher returns for our investors."