Developer raises £300m after international merger
Warwick-based First Industrial has merged with international developer Panattoni Europe and raised £300m to spend on new land purchases and speculative development in the UK.
The new business, First Panattoni, will use its scale as it seeks to take advantage of the opportunities it sees in the UK.
“We’ve always wanted to expand in the UK, but until now we’ve never found the right partner,” said Carl Panattoni, chairman of the Panattoni Development Corporation.
“Not only is First Panattoni a highly complementary addition to our global network, but it also provides the perfect conduit to deploy the weight of capital we have looking to invest in the UK.”
Panattoni is one the largest industrial developers in Europe but has, until now, concentrated on mainland Europe.
Dudley Mitchell, director of the Panattoni Development Corporation, said “you need to bid aggressively and spec build” to penetrate the UK market.
“Limited land supply and a slow permitting process means that land is expensive,” he said.
“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.”
First Industrial was created in 2009 by former Prologis development director Matthew Byrom, and global managing director Ken Hall, with the backing of entrepreneur Terry Lister and private equity investors.
One of its first big deals was to build the 1m sq ft Marks & Spencer facility at Castle Donington, and it has gone on to work for other large players in the market, including Co-op, Sainsbury’s, DHL and Amazon.
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.”
