Heathrow’s Full Occupancy Across Real Estate Portfolio

14 September 2020

One of the largest private landlords at Heathrow has achieved full occupancy across its London-focused airport industrial real estate portfolio. 

Aberdeen Standard Investments’ Airport Industrial Property Unit Trust (AIPUT) is marking its 15 year anniversary and has been responsible for 30 per cent of new letting deals at Heathrow so far in 2020, including a lease extension with Kuehne+Nagel, the world’s largest air freight forwarder, at its South Cargo Centre location.

This facility played a key role in the COVID-19 pandemic, supporting national resilience through large scale import and export of pharmaceuticals and export equipment.

“Achieving full occupancy in the context of COVID-19 demonstrates the unquestionable need for and resilience of AIPUT’s airport-focused real estate portfolio in even the most testing economic environment.”

–Nick Smith

Fund Manager, AIPUT

 

2.1m Sq Ft Portfolio

AIPUT is one of the largest private landlords at Heathrow, with a portfolio of some 2.1m sq ft.  The fund has recently agreed an extension to its £200million revolving credit facility with RBSI (Royal Bank of Scotland International) through to late 2022.  

The most recent transactions bringing the portfolio to full occupancy were lease agreements with Automania Garage Services (AGS) and PRS Distribution at Airport Gate, together representing almost 100,000 sq ft of industrial warehousing. AGS is a new customer for AIPUT, whereas PRS has a long-standing relationship with the fund, having previously occupied space at its Blackthorne Point location.

Nick Smith, Fund Manager at AIPUT, commented: “Achieving full occupancy in the context of COVID-19 demonstrates the unquestionable need for and resilience of AIPUT’s airport-focused real estate portfolio in even the most testing economic environment. The portfolio is as market resilient as it has ever been, due to our determination to be responsive to the evolving needs of our customers. 

“We will continue to manage the AIPUT portfolio to prioritise maximum occupancy and a durable income stream; working to successfully navigate our way through this extremely challenging period for commercial property, whilst also working with our clients to identify future growth opportunities.

“Whereas the Heathrow industrial property market is currently working effectively, we expect that a resurging consumer demand and national need will put further pressure on a distinctly limited availability of new warehouse space.”  

Airport Gate Refurbishment

In preparation for the handover to AGS, Units 2-4 at Airport Gate were extensively refurbished during the lockdown period, ensuring that the buildings would be completed in time to meet the company’s required timescale for occupation. 

Prior to the most recent Airport Gate lettings, AIPUT also completed a 28,000 sq ft long-term lease in May 2020 with Rygor Commercials at its Camgate location, also at Heathrow.  

Earlier in 2020, AIPUT secured planning permission for two new warehouse buildings at its dnata City East site in Stanwell (115,000 sq ft) and the Blackthorne Point estate at Poyle (Slough) of 28,000 sq ft.  

The former has been pre-let to dnata and will operate in conjunction with the existing state-of-the-art 242,000 sq ft warehouse that began operations with dnata (and its customers, Virgin Atlantic Cargo and Delta Cargo) in September 2019. The two buildings at dnata City East will process around 10 per cent of Heathrow’s total air freight capacity.

The new warehouse at Blackthorne Point is being promoted as a rare high quality “coolbox” opportunity for specialist temperature-controlled operators such as life sciences, food-perishables, benefiting from market-leading design specification for an occupier to thrive in a post COVID world and to offer the best working environment for their staff.      

Picture: An aerial photograph of the Heathrow site 

Article written by Ella Tansley | Published 14 September 2020

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