Promising to deliver six million sq ft of Yorkshire logistics floorspace is a grand way to introduce yourself. But Verdion – the new logistics property business piloted by Mike Hughes – is no ordinary warehouse developer, as David Thame finds out.
With its roots fi rmly planted in the European logistics business, and a determination to speak its clients’ language – whether that means the language of supply chains, or fl uency in Swedish, Slovak, Dutch, German, or French – Verdion makes a contrast with Anglophone rivals like Amercian Prologis or Australian giant Goodman.
The Doncaster iPort scheme is the first eye-catching venture since Verdion emerged from the old Helios Europe brand in March last year. Helios Europe was no slacker. Between 2010 and 2012 – two of the worst years for economic growth – Mike Hughes pre-let over 1.2m sq ft of warehouse floorspace in Germany and put together an enviable pipeline of new business across mainland Europe.
Today Verdion has backing from the eccentrically-named Ontario state pension fund – HOOPP – and is building a €1bn logistics portfolio within five years.Chief executive Mike Hughes explains: “The real story is that we’ve got funding from HOOPP to complete the rail infrastructure and motorway link road at iPort – which means iPort is not a virtual-reality warehouse scheme like some of those touted by other developers, schemes that don’t have funding and have yet to go through the planning process. “iPort is going to happen, and because we know there is only limited demand for logistics fl oorspace in the UK, and only the best truly deliverable schemes will succeed, we think we can win. “iPort has taken 12 years to get to this far if you include land assembly, planning and funding. It’s very deliverable.”
Hughes’ enthusiasm for iPort comes after Helios Europe pulled out of a rival scheme at Etwall. Last year Severn Trent chose Goodman and Yorkshire-based Shepherd Group to develop the 5m sq ft Etwall site, Derbyshire.
The scheme has been debated since 2009 – and Hughes had been associated with it – but as yet there is no planning permission, and no rail freight interchange.When Hughes pulled out of Etwall, hesaid: “We were in discussions with Severn Trent for a number of months but were unable to agree commercial terms. Etwall is a good idea but on the distant horizon.” Today the focus is on iPort – and on a clutch of other European schemes. Hughes is also lining up new development sites in what he described as “core UK locations.”
Those locations are unlikely to be where his rivals are already entrenched.Hughes says: “When we first became involved in Doncaster 12 years ago, London observers were baffled – they thought Doncaster was too far north for a prime distribution site. But what they didn’t take into account is that logistics companies are always trying to reduce supply chain costs, the costs of labour and property, and that is all part of the mix when they are choosing locations. So there is scope for the evolution of locations and for new locations.”
Verdion – the name is meant to conjure up the idea of verdant green growth – will grow in the UK, but the emphasis remains firmly on European clients and European connections. “Most of our team speak two languages, several speak three,and those European links bring entrepreneurial ideas. Our occupiers,
too, tend to be European in scope.We are not UKcentric,which makes us attractive to people outside the UK – and to UK customers looking at Europe. It was a very conscious decision to build a European business and we can literally talk to our clients in their language,” says Hughes. Inevitably, with UK politics taking an anti-European Union turn, Hughes finds watching evening news bulletins hard work.
“I’m passionate about business in Europe and the sometimes narrow and inward looking aspects of the UK property market are things I don’t like. I don’t like the Little Englander attitude.” Verdion is – as its name wants us to believe – a growing business. And so long as Europe remains one of the most intricate and competitive logistics markets in the world, it has a lot more growing to do.
WHERE THE MONEY COMES FROM ...
Verdion has an exclusive arrangement to invest in European logistics property on behalf of the Healthcare of Ontario Pension Plan (HOOPP). HOOPP is one of the largest and most successful defined pension plans in Canada, with 274,858 active members and pensioners and $47.4bn in assets available for pensions. HOOPP is backing the iPort scheme in Doncaster, along with developments in Germany, and a 5m sq ft additional development pipeline.
Verdion has appointed Gent Visick, CBRE and Cushman & Wakefield as letting agents for iPort, its £400m Inland Port project in Rossington near Doncaster, marking the offi cial start of marketing for one of UK’s largest logistics developments.
Inland Port (shortened to iPort) is a 700-acre strategic railfreight interchange which will deliver over 6 million sq ft of Grade A logistics warehousing, and which has backing from the Healthcare of Ontario Pension Plan (HOOPP). The current proposals are for six large footprint buildings from 1m sq ft each, with high-bay facilities of up to 35m permitted. The fi rst buildings will be available for occupation from as early as 2015.
Enabling works commenced in November 2013 with the start of the Finningley and Rossington Regeneration Route Scheme – the link road which will serve the scheme. The three-mile stretch of road will include a dual carriageway from Junction 3 of the M18 motorway. The link will continue as a single carriageway to the A638, connecting the Doncaster Sheffield Airport, and a direct connection will be provided into iPort.