The German investor Union Investment has completed its purchase of a new, state-of-the-art warehousing and distribution facility being developed by Penneys in Newbridge, Co Kildare.
While the value of the deal has not been disclosed, the purchase price is understood to be in line with the €129 million first revealed by The Irish Times in its report on negotiations between the parties last November. Based on that figure, Union Investment stands to secure a yield of 3.7 per cent on its investment.
The new distribution centre, which is due to open by the end of summer 2024, is being developed by means of a forward-funding structure by Barola Capital DAC. Penneys, or Primark as it is known as internationally, is investing an additional €75 million in the facility.
Upon completion the Newbridge development will comprise a distribution centre, and warehouse and office space extending across a gross floor area of 64,550sq m (694,810sq ft) on a 15.42-hectare (38.1-acre) site.
As part of its planning application Penneys outlined measures that it intends to take in the new facility to maximise efficiency and reduce its environmental impact, such as rainwater harvesting for water reduction, use of air-source heat pumps to provide heating where required and the use of solar panels to reduce primary electrical energy input.
There will also be more than 2.3 hectares (5.6 acres) of landscaping, including native Irish trees, wildflower meadow and ponds, throughout the site.
The facility is being developed as an addition to Penneys’ current depot in Naas, which has serviced the company’s operations in Ireland for the past 17 years.
The new Newbridge depot will employ 212 people and act as an all-island facility, creating additional capacity and serving the retailer’s shops on both sides of the Border. The facility will also support Penneys’ ongoing national and international growth and supply chain network strategy into the future.
Commenting on the agreement of deal, Stephan Riechers, head of logistics investment at Union Investment Real Estate, said: “Ireland has become an attractive location for logistics investment due to its increased transaction volumes and enhanced liquidity. Despite concerns about the impact of Brexit and the coronavirus pandemic, demand from tenants remains high in the Irish logistics market. The shortage of suitable space is a key driver of the market.”
Union Investment was advised by Knight Frank, A&L Goodbody and Drees & Sommer. Barola Capital DAC was advised by JLL, Savills, Arthur Cox and Quartz Project Services.
Union Investment’s European logistics portfolio is worth around €1.6 billion and comprises 29 properties across Ireland, Germany, France, the Netherlands and Switzerland.