Moorfield Group and Peloton Real Estate’s Open-Storage Joint Venture Shortlisted for Commercial Deal of the Year
Moorfield Group open-storage joint venture (JV) with Peloton Real Estate has been shortlisted for Commercial Deal of the Year in Property Week’s Property Awards. The £100m JV was completed in March 2022 and is the first high-profile strategic partnership in the UK open-storage sector, marking a significant growth indicator in a sector yet to be meaningfully penetrated by institutional capital.
The JV, with Peloton Real Estate as the operator, aims to build-up an initial £100m portfolio and focus on assembling a geographically and occupationally diverse portfolio of sites, to generate a secure income profile, while adding value through active asset management initiatives. Open storage is a needs-based sector that is yet to be professionalised, and Moorfield Group’s entry into this sector illustrates their confidence in such sectors. It also sits alongside its other industrial strategies in logistics and self-storage.
Open storage, also known as outdoor storage, is a relatively new and unexplored real estate asset class in the UK. It typically refers to the leasing of outdoor storage space for commercial or personal use, such as vehicle storage, container storage, or self-storage containers. The sector has been gaining traction in recent years, particularly due to the increase in e-commerce and online shopping, which has led to a surge in demand for warehousing and logistics space. The Covid-19 pandemic has further accelerated this trend, with more people opting to shop online rather than visit physical stores.
Despite the potential for growth in the sector, open storage remains largely untapped by institutional capital, with most of the facilities being owned and operated by small, independent operators. Moorfield Group’s JV with Peloton Real Estate is therefore a significant milestone in the development of the open-storage sector in the UK, as it marks the first time that institutional capital has been deployed in the sector.
The joint venture is expected to benefit from Peloton Real Estate’s expertise in the self-storage sector, as well as Moorfield Group’s experience in the industrial and logistics sectors. Peloton Real Estate and has a proven track record of successful asset management. Moorfield Group, on the other hand, has a strong track record of investing in and managing industrial and logistics assets, with a focus on generating attractive risk-adjusted returns for investors.
In conclusion, Moorfield Group’s open-storage joint venture with Peloton Real Estate is a significant development in the UK real estate market, as it marks the first high-profile strategic partnership in the open-storage sector. The JV is expected to generate a secure income profile while adding value through active asset management initiatives. This move into open storage is a testament to Moorfield Group’s confidence in needs-based sectors that are yet to be meaningfully professionalised and is a strong addition to their industrial strategies in logistics and self-storage. With the growing demand for warehousing and logistics space due to the increase in e-commerce and online shopping, the open-storage sector is likely to see further growth in the coming years.