A £1 billion investment is now planned for the West Midlands Interchange at Gailey, Four Ashes and Calf Heath.
The 734-acre site has been acquired from the shareholders of Four Ashes Ltd, a three way partnership including Kilbride Holdings and Grosvenor Group’s Indirect Investment business.
Oxford Properties Group and Logistics Capital Partners have formed a joint venture to develop what the say is the UK's largest logistics site.
It will involve an 8 million sq ft new logistics hub with a new strategic rail freight interchange next to the M6 and close to the A5 and A449.
The developers say the West Midlands Interchange – the size of 430 football pitches – will drive economic growth, generating 8,500 jobs, a further 8,100 indirect jobs and 109 acres of new parkland.
Oxford is a leading global real estate investor, asset manager and business builder, and LCP, a developer and asset manager of logistics real estate across Europe.
They investment in the project will take place over a number of years, with Oxford providing the majority of the capital and working alongside LCP’s highly experienced and professional team as development manager.
Planning consent had already been secured by Four Ashes Ltd, which allows for the delivery of around 8 million sq ft of prime logistics space and provides flexibility around the project timeline and scale of units.
Infrastructure works are expected to start in the first half of next year with the first buildings starting on site in 2022 ready for occupation in 2023.
The site can accommodate new warehouses ranging in size from 200,000 sq ft to more than 1 million sq ft, with building heights up to 30 metres.
The completed project is also expected to generate around £430 million of local economic activity each year, and, through the supply chain, create over £900m of economic activity each year nationally.
As part of wider infrastructure improvements, Oxford and LCP will build a new link road to connect the A5 and A449, enhancing the resilience of the local road network to improve access to the site and achieve additional public benefit.
The strategic rail freight interchange is also intended to help reduce congestion on the roads.
The West Coast Main Line is already one of the most important freight routes in the UK and its capacity is likely to be transformed by High Speed 2, due to open between London and Birmingham in 2026.
Two new country parks are also planned on the site.
James Boadle, head of logistics and residential for Europe at Oxford Properties, said, “In recent years we have significantly increased our exposure to the logistics sector globally through several major transactions, including making our first direct investment into European logistics last year with LCP.
"Logistics remains one of our highest conviction calls globally, benefitting from substantial under supply of prime new space while the growth of e-commerce and demand for expedited supply chains continues unabated, accelerated by the effects of Covid-19.
“The transaction represents a rare opportunity to gain significant exposure at attractive risk-adjusted returns in an increasingly competitive landscape.
"We are pleased to be again working alongside LCP’s highly experienced and professional team as we deliver a best-in-class logistics park with occupier demand, technological advancements and environmental, social and governance principles at its core.”
Pierre Leocadio, head of investment for Europe at Oxford Properties, added, “This transaction presents an exciting opportunity to develop a market leading, prime logistics hub, alongside our trusted partner, LCP. Oxford is renowned for its ability to deliver major large-scale projects, and this aligns with our strategy to deploy capital at scale into the logistics sector.
"The inclusion of a new rail terminal in the master plan allows us to create a site that has strong appeal to potential occupiers, while also helping reduce the environmental impact of its supply chain by reducing lorry traffic. The project will also create economic impact to the region through the creation of a significant number of local jobs.”
John Pagdin, head of UK logistics Capital Partners, commented: “We have been tracking this particular site for some time and are delighted to have secured the park alongside Oxford Properties. West Midlands Interchange is a fantastic opportunity to build out a uniquely positioned development scheme, allowing us to offer occupiers every possible size, scale, configuration and specification of unit with none of the usual planning delays or uncertainties often associated with schemes of this nature. We look forward to progressing first stage preparatory works and welcoming occupiers to this exciting project.”
Peter Frost, director of Kilbride Holdings on behalf of Four Ashes Ltd, said: “Having successfully guided the development from its inception and earliest stages to development consent, we are pleased that partners Oxford Properties and LCP will bring funding and specialist expertise to enable the project to now fulfil its huge potential.”