SEGRO has agreed to purchase Roxhill’s management platform in a bid to further integrate the businesses.
The company plans to speed up its investments in the privately-funded developer by bringing all of its business ventures with Roxhill in-house.
The deal is scheduled to complete in November. It will create a single team, based in the Midlands, focusing on managing and developing big box warehousing sites in the UK.
Roxhill employs around 18 staff. However, it has not yet been determined how many will be joining SEGRO.
David Sleath, chief executive of SEGRO, confirmed: “By combining SEGRO’s and Roxhill’s teams, we will have the resources to deliver on our strategy to grow our big box warehouse position in the two strongest logistics regions in the UK, and the expertise and network to create an on-going pipeline of schemes in the future.
“We will be even better-placed to meet occupier demand for modern, well-located warehouses which are an increasingly critical component of the national infrastructure dealing with the impact of e-commerce.”
“Exciting opportunity”
As previously revealed by EG, SEGRO agreed a tie-up with the Rugby-based developer in early 2016 in a non-corporate deal.
At the time, SEGRO and Roxhill Development Group entered a partnership that allowed SEGRO phased access, through option agreements, to a portfolio of big box warehouse development sites in the Midlands and South East.
The REIT had agreed to buy options on 11 sites in the South East and Midlands with an end value of £800m, totalling around 600 acres, with the capacity for 11m sq ft of development.
Under the same agreement, SEGRO had the right to acquire the management platform, Roxhill Management Rugby Limited, after a period of 30 months.
David Keir and Jason Dalby, founders of the Roxhill management team, said: “We are pleased that SEGRO have taken up their option to acquire RMRL, which is testament to the quality of the staff and the progress that they have made on the joint venture sites since 2016.
“The pipeline of land for development at SEGRO’s disposal is market leading and affords an exciting opportunity for both SEGRO and the RMRL employees alike.”
Further development potential
The idea for a tie-up between SEGRO with Roxhill had originally occurred to SEGRO’s leadership team in 2013, when the two businesses jointly acquired the 125-acre Rugby Gateway site.
The deal, which marked SEGRO’S first big venture into pure logistics, was the third of a string of partnerships with Roxhill, including sites in Portsmouth and Enfield.
Joint schemes between the pair include a planned 700-acre “inland port”, combining links to the M1 and East Midlands Airport with a new rail freight terminal.
The development, called SEGRO Logistics Park East Midlands Gateway, launched in October 2017. The park is capable of supporting 550,000 sq m (5.9m sq ft) of big box warehouse space.
SEGRO and Roxhill so far have secured customers for 250,000 sq m (2.7m sq ft) of new big box warehouse space, and construction of the new rail freight terminal has already commenced.
SEGRO is currently assessing the near-term development potential of a further five sites. It retains longer-term optionality over the remaining sites covered by the original agreement.
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