Category: INVESTMENT

West Property Group celebrated its fifth anniversary late last year

Co-founded by Niall Hegarty and Nic Morris in 2019, the privately-owned real estate company has since built a portfolio of 20 high-quality industrial assets across South Africa and the United Kingdom with an investment in a residential development business that owns over 450 apartments held as rental stock.

The first asset West acquired was a premium grade industrial warehouse in Pretoria, let to a blue-chip tenant, with a triple-net long-term lease. West has since shifted its focus to areas such as Linbro, Long Meadow, West Lake and LordsView in Johannesburg and Montague Gardens, Milnerton and Richmond Park in Cape Town. The West industrial portfolio comprises of 11 warehouses with a total gross lettable area (GLA) of over 100 000m2 (with other developments currently under construction).

In the UK, West holds a share in a portfolio of warehouses situated in and around the M25 motorway in London with a prime investment at Stansted Airport, all tenanted by last mile logistics and service companies.

While the Fund was founded pre-COVID-19, before the knock-on effects severely impacted the economy and real estate industry, West remained confident that its strategy and high-quality assets would be defensive through the cycle.

“When we founded the company in 2019, our core strategy was to acquire a rental portfolio of prime logistics and light industrial warehouses in key nodes within South Africa’s major metros. Subsequently, our growth has steered us into the property development space too, having completed five industrial warehouses to date,” says Nic Morris.

Its aim is to have at least 85% of its total GLA as warehousing with 15% allocated to office, all featuring high-quality finishes.

The Fund is biased towards on-grade easy access facilities, large yards with high-quality flooring and a minimum roof height of at least 9 metres to the underside of the eaves, which allows for ample racking and storage space. These key criteria ensure West’s assets are defensive, fundamentally sound, and appeal to a wide variety of tenants. Wests focus has been to attract blue-chip tenants on long-term triple net leases with an aim to achieve a weighted average lease expiry of more than seven years.

Most of West’s assets are rated green carbon neutral, supplemented with solar power, backup water and state-of-the-art fire systems with sprinklers, pumps, and tanks.

With a large pipeline and ample runway from an acquisition and development point of view, West’s strategy going forward is to double its industrial portfolio and to grow its business through strategic partnerships.

“Our small inhouse team prides itself on the close, proactive relationships we have with all our tenants, positioning West Property Fund as the landlord of choice,” says Niall Hegarty. “Most of our tenants have been with us for many years and our asset management and property management teams efficiently address any issues that arise, which ultimately retains tenants in the long run.” says Niall Hegarty.

“In Cape Town, land for logistics development is scarce and vacancies remain low in Johannesburg. West believes that high-quality, modern facilities, in the right nodes, are highly sought-after and will remain in demand for the foreseeable future,” says Nic.

“As with any business, we believe that a cautious approach to growth will ensure long-term success, and we are careful not to go too far and wide chasing deals.”

Nic says that there are great listed and private real estate players in the South African industrial space, acknowledging that the sector has become competitive with the buoyed demand for quality assets in prime areas.

“There have been numerous struggles for West including COVID-19, Brexit, the riots in South Africa, and the current high-interest rate environment. However, with the declining interest rate environment starting to emerge in South Africa and the UK, our team is excited for what the future holds.”

“Our young energetic team shares the same vision as our shareholders and we are all highly motivated to continue to grow a market leading property business. We have ensured that our assets have all the right fundamentals in place, are well maintained, and are positioned in safe and secure areas. It has been a great five years, and we are excited for what lies ahead,” he concludes.

Goscor Lift Truck’s new home in Lordsview Industrial Park

West is excited to announce the successful completion of the innovative new Goscor headquarters in Lordsview Industrial Park in Gauteng.

The newly completed 14,800m² headquarter building is let under a long-term lease and is carefully considered to optimise Goscor’s operations through housing the business and its various divisions under one roof. This has led to increased collaboration and improved efficiency across the product offerings.

The development boasts 12,080m² warehouse integrated with 2,720m² of office and customer facilities.

Goscor saw this new facility, housing their head office and service divisions, as an opportunity to redefine themselves to the market and renew the culture of the company. After many years of organic growth in old existing buildings, this new bespoke, state of the art facility gave Goscor the ability to express their dynamic, forward looking outlook on both client offerings and staff beneficiation.

The design is intended to be both modern and timeless, expressing strong materiality, which is both dynamic and maintenance friendly. The building is shaped around the wetland, with extensive glazing and public staff offerings, including canteens, balconies and recreation areas all looking out over this natural beauty.

Professional team

Architects: Empowered Spaces Architects
Project Managers: Empowered Spaces Architects
Quantity Surveyor: KMA Quantity Surveyors
Civil Engineers: DG Consulting Engineers (Pty) Ltd
Structural Engineers: DG Consulting Engineers (Pty) Ltd
Mechanical Engineers: Ingplan Consulting Engineers
Fire Engineers: Ingplan Consulting Engineers
Electrical Engineers: Conscius Electrical Consultants
Principal Contractors: Abbeydale
Interior Architects: Plae Interiors

Weg Cape Town new facility is now open for business

Construction of the new Weg Cape Town distribution facility commenced in July 2022 and was completed in February 2023.

West Property Fund is proud to announce the successful completion of a new 4,250m² facility for Weg in Cape Town’s highly sought after Richmond Park. The state of the art development has significantly enhanced Weg’s ability to serve its growing customer base in Western Cape, reinforcing its commitment to operational excellence & customer service.

The Weg project is another milestone in West’s strategic expansion within Richmond Park. It follows the recent completion of a 10,000m² headquarters for get\Worth (Motus) further cementing the park’s status as a prime business hub.

These developments reflect our dedication to delivering high-quality properties that support the growth and success of our tenants.

Professional Team

Architects: Empowered Spaces Architects
Project Managers: Empowered Spaces Architects
Quantity Surveyor: KMA Quantity Surveyors
Civil Engineers: DG Consulting Engineers (Pty) Ltd.
Structural Engineers: DG Consulting Engineers (Pty) Ltd.
Principal Contractors: Abbeydale Cape
Electrical Engineers: Converge Consulting Engineers
Fire Consultants: TDW International Fire Consultancy CC
Interior Architects: Tridyum Interiors
Mechanical Engineers: QMECH Consulting Engineers

West Property Fund and Milkwood Property Holdings adds two new properties to UK portfolio

As part of West Property Fund’s expansion into the United Kingdom, we are excited to announce that Milkwood Property Holdings, an associate of West Property Fund, has acquired two new properties in Basildon, Essex and Bishop’s Stortford, Hertfordshire, respectively. This expands our UK portfolio to a total of eight properties and circa 225,000 sq ft.

The 57,685 sq ft Basildon property is centered around the north of the town centre, at Festival Park, Burnt Mills Industrial Estate, Juniper Park and Zenith Business Park.

The property is being leased on a long-term basis to a third-party logistics company offering transport and logistic solutions through air, ocean and road freight. Constructed in 2019, the building boasts a ‘Very Good’ BREEAM rating and an Energy Performance Certificate (EPC) of A.

Covering 27,750 sq ft, the Bishop’s Stortford property is conveniently situated on Junction 8 of the M11 motorway, a mere 5-minute drive from London Stanstead airport.

The building is being leased on a long-term basis to a world leader in serving science providing cryogenic storage services on the premises. A huge benefit of the property is a rare 1MVA power supply, which unlocks many potential future uses of the space. The building has an EPC of B.

The acquisition of these two properties is another step forward for West Property Fund and Milkwood, allowing us to continue to expand our portfolio of high-quality, sought-after industrial real estate in our focus areas in the south of England.

Zest WEG makes a move into the highly sought-after Richmond Park

Construction is due to commence in July 2022 on a new 4,148m2 building for Zest WEG in Cape Town’s highly sought-after Richmond Park.

Already home to a wide range of logistics and distribution companies, Richmond Park is a unique mixed-use development situated along the N7 in close proximity to Montagu Gardens, which offers its tenants a world-class business environment.

Zest WEG is a subsidiary of leading Brazilian motor and controls manufacturer WEG, with a strong commitment to contributing to the development of the African Region. The Zest WEG headquarters is based in Johannesburg, and this development will extend their operations to a new warehouse space in the Western Cape.

The Zest WEG project marks the second development for the West Property Fund in Richmond Park, following the recent completion of a new 10 000 m2 headquarters for tenant get\Worth.

This new development further enhances West Property Fund’s grounding in what is emerging to be the most defensive asset class in the current economic climate. According to recent reports, industrial property is experiencing a resurgence in demand – even in an increasingly constrained South African economy. This is driven largely by tenants looking for modern and new industrial buildings in centralised logistic hubs, such as Richmond Park.

Our first greenfields development is well under way

We recently broke ground on our first greenfields development – a 10,000 square metre building on an 18,500 square metre site in Cape Town’s in-demand Richmond Park, a project in partnership with the Som Group.

The warehouse, due to be complete in November 2021, was developed specifically for get\Worth, whose major shareholder is MOTUS, off the back of a long-term lease agreement.

Richmond Park is a unique mixed use development situated along the N7 in Cape Town, in proximity to popular Montagu Gardens.

Already home to a range of logistics and distribution solutions providers, the Park services local and international clients. This new development, along with our other recent acquisition in the United Kingdom, enhances West Property Fund’s grounding in what is emerging to be the most defensive asset class in the current economic climate. Even though the South African economy is constrained, the demand for logistics and lightweight industrial properties continues to grow.

Linbro Park renovation gives West Property Fund a competitive advantage

We recently renovated one our logistics properties in Linbro Business Park, and shortly thereafter signed a new long-term lease agreement with Hudaco Limited, a JSE listed blue chip company that specialises in the import and distribution of high quality branded automotive, industrial, and electrical consumable products.

The property will house 3 subsidiaries of Hudaco, namely Powermite, Varispeed and Three-D Agencies.

The Linbro node is one of the most successful light industrial property districts in South Africa, attracting rentals of around R65 per square meter, and has a low vacancy rate below 3%. Its proximity to Sandton, Midrand, and OR Tambo International Airport (by road and train) makes it a popular warehousing and distribution hub.

West Property Fund has three warehouses in the node.

 

West Property Fund buys additional UK property, inside M25

We recently acquired a share in Chaucer House, a logistics property, in south east of London. This acquisition expands our UK portfolio to six properties. We are particularly excited about this new acquisition as it is our first property situated to the east of London in a very sought after node close to excellent transport links, just five miles from Junction 1A of the M25, and the Queen Elizabeth II Bridge. The M20 motorway is also within easy reach, providing access to the major ports of Dover and Folkestone.

A refurbishment project is already well under way, which, once complete, will position the asset to attract blue chip logistics tenants at higher rentals on long-term leases. This is likely to be supported by plans to improve and transform the area in coming years, with substantial infrastructure development planned, along with a new residential development nearby.

Logistics property demand in the UK was boosted in the short term by trends arising out of the pandemic, with the sector likely to see continued growth into 2021.

Overall trends in the region are emphasizing the appeal of light industrial property that’s well suited to logistics and other similar businesses. Even though the UK’s vaccination programme is already ubiquitous, the popularity of online shopping continues to increase, as does demand for other consumer goods across the country.