Warrington shelves £220m Trafford Park deal
The council has walked away from purchasing a series of industrial estates owned by US investor Harbert Management Corporation, due to current market uncertainty.
Although the deal had not formally concluded, Warrington Council had agreed to buy a chunk of Harbert’s 4.4m sq ft portfolio at Trafford Park in Greater Manchester, which includes assets such as Trafford Point, a pair of warehouses totalling 240,000 sq ft on Ashburton Road West close to Junction 10 of the M60, and North Point units one and two, industrial warehouses of around 62,000 sq ft each on Mosley Road.
Harbert owns the assets through its Harbert European Real Estate Fund III. It acquired 2m sq ft of real estate at Trafford Park from Segro in 2012 in a joint venture with Canmoor, and then speculatively developed more premises at the park.
Trafford Point is let to occupiers including Manchester-based safety equipment supplier Globus, which has 100,000 sq ft on a 10-year lease from 2019, and North Point is let to US logistics operator Expeditor and tool and equipment supplier HSS Hire.
Alabama-based Harbert also owns Heywood Distribution Park near Bury.
The Trafford Park assets were on the market for £200m from mid-February and went under offer to Warrington Council, which offered to buy them for £20m above the asking price. Harbert was represented by industrial agency DTRE.
However, the council has since opted not to pursue the deal, citing an uncertain market and difficulties in completing due diligence and other necessary decision making while the Covid-19 pandemic is ongoing.
“We are no longer under offer and no longer pursuing this purchase,” said Steve Park, director of growth at Warrington Council.
“If it is still available in four months’ time then maybe we would revisit the talks, but right now our ability to even assemble a decision-making forum is hampered, while the risk profile for this acquisition will also have changed.
“It’s an odd old time and we will have to see where the market is later in the year.”
Local authorities have sought to acquire assets from the private sector to boost investment portfolios and generate revenues for their operations.
Warrington has been especially active, purchasing the Birchwood Park business park north-east of Warrington from Oaktree Capital for £211m in 2017.
Trafford Council has also made acquisitions, most recently its purchase of Stretford Mall and the Stamford Quarter in Altrincham in a joint venture with developer Bruntwood Works. It also agreed last November to loan £60m to CIS Tower owner Castlebrooke Investments, to refurbish and refinance the 361,000 sq ft grade two-listed building.
It is understood that Trafford Park is still on the market.
This week it emerged that another North West deal appears to have been scuppered in the current climate. Asset manager Columbia Threadneedle Investments withdrew from an agreement to buy Manchester Airport Group’s £510m Project Victoria portfolio, comprising non-operational land at airports in Manchester, the Midlands and London.