#H.I.G. Capital #United Kingdom #Urban Logistics #Greater London

H.I.G. Realty Expands its Urban Logistics Footprint in the UK

In an exciting move for the urban logistics sector, H.I.G. Capital, a prominent global alternative investment firm managing $70 billion in capital, has made strides in the UK market by acquiring two key last-mile logistics estates in Greater London. This acquisition solidifies H.I.G.'s commitment to enhancing its presence in one of the most dynamic industrial landscapes in Europe.

Strategic Acquisitions

The newly acquired properties, located in Erith and Rainham, were obtained off-market and are strategically situated along major logistics arteries that provide direct access to Central London and other crucial routes. This advantageous positioning is expected to maximize efficiency and facilitate streamlined operations for logistics partners.

Both estates are not only fully occupied but also present a considerable value-add potential. With existing rental agreements that are significantly below current market rates, H.I.G. plans to implement a phased refurbishment and reconfiguration strategy. This initiative aims to reposition the sites for high-spec and sustainable logistics applications tailored to cater to various industries, particularly for last-mile needs and flexible outdoor storage.

Unlocking Value

Acquiring these sites at a notable discount relative to their replacement cost provides H.I.G. with a unique opportunity to unlock embedded upside. The firm aims to enhance these properties through targeted upgrades and operational improvements, capitalizing on the current demand-supply imbalance within the logistics market in London.

Following the addition of these two assets, H.I.G.'s UK Urban Outdoor Storage (IOS) platform now extends over 1.5 million square feet, boasting a gross asset value (GAV) exceeding £300 million. The firm remains concentrated on securing holdings in high-barrier submarkets throughout London and strong demand areas like the Golden Triangle, where the need for modern logistics space significantly outweighs current supply levels.

Expert Insights

Riccardo Dallolio, Managing Director and Head of H.I.G. Realty in Europe, expressed enthusiasm regarding these acquisitions. He commented, “These transactions reflect our confidence in the sustained growth of urban logistics and our ability to identify undervalued opportunities in this ever-evolving sector. With their strong income generation and potential for significant rental enhancements, these sites perfectly align with our strategy to expand in high-grade logistics markets.”

In alignment with this vision, Jérôme Fouillé, also a Managing Director at H.I.G. Realty in Europe, emphasized the firm's commitment to developing a robust portfolio of logistics assets. He articulated, “Our focus remains on acquiring well-located estates in urban infill markets, characterized by solid fundamentals and limited new supply. These recent acquisitions exemplify our operational strategy and thematic approach targeting mispriced properties that can be transformed into modern, environmentally-friendly logistics facilities.”

The Future of Logistics

H.I.G.'s forward-looking perspective is further supported by an ongoing evaluation of a strong pipeline of similar acquisition opportunities across the UK and continental Europe. The firm continues to seek out high-potential logistics properties that align with its standards for sustainability and institutional-grade quality, aiming to contribute positively to urban infrastructure.

About H.I.G. Capital

Founded in 1993, H.I.G. Capital has a diverse portfolio that encompasses various sectors. The firm is headquartered in Miami, with a substantial international presence including offices in London, Hamburg, Madrid, and several other global cities. H.I.G. specializes in providing both debt and equity capital to middle-market companies, effectively driving value creation through operational improvements and strategic investments. Its commitment to enhancing asset management practices ensures that clients and investors are well-equipped to navigate the complexities of the financial landscape.

For further information on H.I.G. and its services, visit H.I.G. Capital's website.