io Group - Industrial Development - £250 Million Industrial Development Partnership
Date: 25 Sep 2000
The io Group Limited, the specialist industrial property developer and asset manager, and LaSalle Investment Management has closed Industrial Development Partnership II (IDP II). The £250 million limited partnership - which was oversubscribed - will give institutional investors geographically spread exposure to high-yielding multi-let industrial developments, known as io centres.
A LaSalle subsidiary has become the fund's General Partner, with a board to be chaired independently by Douglas Gardner, the former Chairman and Chief Executive of Brixton Estate plc, and including LaSalle Directors Philip Gadsden and Andrew Jeanes. IDP II will be Gardner's first property venture since leaving Brixton.
Norwich Union, Scottish Widows, Clerical Medical Investment Management, National Provident Institution (a client of Henderson Investors) and five institutional clients of LaSalle, including British Coal Pension Funds, have committed £105 million of equity to Industrial Development Partnership II. Gearing will be introduced after completion of each scheme to fund a total development programme of up to £250 million.
IDP II will buy sites and speculatively develop approximately 20 io centres throughout the UK, totalling around 4 million sq ft. io centres are purpose-built, multi-let industrial estates which are offered to occupiers on highly flexible terms, from leases of any length to purchase options and sales.
Douglas Gardner said: "The io concept is unique in that it provides industrial occupiers with an unprecedented level of flexibility without undermining the strength of the investment. Having spent much of my own carer in the industrial property sector, it is clear to me that IDP II responds to institutional and occupiers' requirements that are not catered for by other property companies. I am delighted to be appointed chairman of this exciting venture."
IDP II follows the success of Industrial Development Partnership I, which was launched in 1998 by io , with backing from British Coal Pension Funds and Britel Telecom Pension Scheme. This partnership is currently developing 4 io Centres totalling 1 million sq ft.
IDP II is expected to have a life of up to 10 years and is targeted to show total returns to investors in excess of 15%. io has identified development sites in Woolwich and Stratford, London, and in Northampton, that are likely to be IDP II's first acquisitions.
Peter James, head of io Developments Limited, said: "The business plan for site acquisition and development is based on io's 12 years' experience in multi-let industrial estates. The formation of IDPII indicates the confidence that investors have in the io system."
Philip Gadsden, European Director of LaSalle Investment Management, said: "As momentum has built across Europe over the last 5 years for indirect forms of property ownership, we have created for our investor clients a variety of opportunities offering proven management expertise and tailored strategies. Working with the io Group, we are delighted to have created IDP 11 for the UK and are looking forward to implementing its strategy and delivering the targeted returns for our investors".
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