UK mid-box industrial and warehouse developer Tungsten Properties has secured a £50m platform funding package for its 1.5m sq ft UK industrial development pipeline. .
The revolving credit facility will be used to finance the development of Tungsten Properties’ £180m logistics development pipeline, amounting to 1.5m sq ft of industrial space across the UK, over a period of 36 months.
The deal was seeded by a £4.4m tranche in September 2019 which has enabled development of Tungsten Park Witham in Essex, a 40,000 sq ft, three unit industrial and logistics scheme which is due to be completed in September 2020. Other schemes to benefit from the capital will include Tungsten Park Witney to fund Phase 1 of its 490,000 sq ft development; the balance will be used for further land acquisitions.
“With the certainty of funding provided by the new facility, we can now unlock the potential of our existing schemes with a greater controlling interest and grow our portfolio with new site acquisitions across the country,” Jeff Penman, managing director of Tungsten Properties said.
The deal represents Fortwell’s first major loan to a commercial developer since January last year. In 2019, Fortwell lent £250m across 10 separate finance facilities to UK developers which concentrated on traditional core markets including private sale residential, care homes and commercial space.
“Take-up in the logistics sector remains strong and vacancy rates are lower than they have been in decades. With the structural changes facing retail, the current demand is for Grade A space from a number of high-profile businesses in the supply chain,” Nikos Yerolemou, associate director at Fortwell Capital, said.
“Tungsten Properties’ development pipeline is a very attractive lending opportunity, given the developer’s longstanding track record of delivering high-end schemes that match market demand,” he added
Captima Capital acted on behalf of Tungsten Properties. A Director at Captima Capital, said “We have worked closely with Tungsten over the past months to identify and secure the right funding partner and this facility will help Tungsten achieve the next phase of its expansion”.