Growth Fund V Update - H2 2023
£9.9m has been committed to the three current projects, with a further £38.2m available for investment. Two further projects are now under offer, a self-storage asset at Telford and a care home planning play at Bedford. Both these projects have Barwood Stage 1 Investment Committee approval and would take the remaining equity availability to £31.1m with the investment period expiring 30 June 2025. There is also an improving pipeline of potential new projects, particularly in the alternative and living sectors as well as industrial and self-storage. However, further attractive and improved buying opportunities may emerge during 2024 as liquidity increases, therefore any new acquisitions will continue to be carefully assessed.
The Fund cashflow forecasts assume a total of 14 projects, with £10m allocated to a self-storage strategy, as communicated to the Advisory Committee. The current forecast sector allocations comprise industrial/office (53%), self-storge (22%) and alternatives (25%), although this remains subject to change as opportunities arise and market conditions continue to evolve.
Project Updates
Aztec West, Bristol – Speculative Industrial Development
The Fund acquired this 1.96-acre low density site at Aztec West, Bristol for £2.35m (£1.2m per acre) in August 2022. The property comprised two vacant and obsolete office buildings totalling 40,000 sq ft.
Since acquisition, the two office buildings have been demolished and planning permission has been secured for 36,327sq ft of industrial warehouse accommodation in a single unit.
The current business plan is however, to hold the site and not progress with the development until such time as general economic and market conditions improve and the asset’s value can be maximised. For the time being, an additional c.£5m of equity otherwise committed to this development will be available for other projects within the Fund.
Victoria House, Greenwich – Care Home Planning Play
The Fund acquired this 15,580 sq ft former Officers’ Mess on a 2-acre freehold property in the Royal Borough of Greenwich, south east Greater London, in October 2022 for £3.675m (£236 per sq ft / £1.84m per acre). The business plan is to secure planning for a 75-bed care home and sell the consented site to an operator.
The previous owners of the site, the Ministry of Defence, obtained full planning permission at appeal in 2009 for a 75-bedroom care home, involving the retention of the existing, locally-listed building façade and side returns. The approved scheme provided for the existing structure behind this to be demolished and replaced with new build accommodation. This consent was renewed in 2011. The planning application for a similar but revised scheme is progressing well and expected to go to Planning Committee in March or April 2024.
Ringmead, Bracknell – Care Home Planning Play
The Fund acquired this 1.7-acre cleared freehold site unconditionally for £1.5m (£882k per acre) in April 2023. The property was formerly a St Margaret’s Catholic Church which was closed in 2011 and demolished in 2012. This site is situated in a highly accessible location 1.2 miles southwest of Bracknell Town Centre, approximately 25 miles west of London.
The business plan is to obtain planning for a 72-bed care home and sell the consented site to an operator. The planning consent has been provisionally confirmed by the Planning Officer under delegated powers, with a sale due to complete before the end of March 2024.