Gazeley is looking east. The industrial developer owned by US retail giant Wal-Mart is setting up businesses in Russia and China.
Pat McGillycuddy, chief operating officer at Gazeley, said that the company would initially invest around £50m next year in speculative schemes in China in joint ventures with a Chinese developer or investor.
He said his team has already identified two locations for developments on sites with a minimum size of 124 acres (50 ha).
He added: “Being a subsidiary of Wal-Mart, it is natural to align our growth and expansion with our parent. China is one location where it can replicate in scale its American operations.”
The big sheds specialist will adopt a similar strategy in Russia, also pairing up with a local developer. McGillycuddy added: “We will need the best possible due diligence. It is still a bit of an unregulated market there. We have to behave impeccably.”
Gazeley has already pinpointed several locations around Moscow’s ring road for an initial scheme, costing around £20m-£25m.
McGillycuddy said: “The brick economies are the areas where growth is predicted.
We’d rather be there than work in low-margin markets in eastern Europe.”
The developer is also planning further schemes in western Europe.
A total of 1m sq ft of speculative space will be built at its Magna Parks in Pagny, France; Budsbach, Germany; and Monticelli, Italy.
In the UK, Gazeley is also pressing ahead with plans for 2m sq ft of speculative space.
The drive will be partly funded by Hermes’ Large Distribution Unit Fund, which has a target of £1bn within five years.
Nick Redwood, managing director of Gazeley UK, said: “We do not expect the Hermes jv to be capable of absorbing all our new development activity. More will certainly follow.”
References: EGi News 12/12/05
