Jul 9, 2021
Dominic Ellis

Plans for £1 billion Birmingham logistics hub unveiled

construction
Logistics
Birmingham
UK
Oxford Properties and Logistics Capital Partners unveil plans for £1 billion Birmingham logistics hub next to the Strategic Rail Freight Interchange

Birmingham's status as a central logistics hub is set to be enhanced with news of a new 8 million sq ft logistics site, which will be built alongside the Strategic Rail Freight Interchange and generate 8,500 jobs.

Infrastructure works at the West Midlands Interchange are expected to commence in the first half of next year with the first buildings starting on site in 2022 ready for occupation in 2023, according to Oxford Properties and Logistics Capital Partners.

Oxford Properties and LCP will jointly invest around £1 billion to bring forward the project, with Oxford providing the majority of the capital and working alongside LCP’s team as development manager. West Midlands Interchange will be a technologically advanced and environmentally sustainable development which meets modern  occupiers’ efficient operational and environmental requirements. Planning consent has already been secured by the vendors.

The site can accommodate new warehouses ranging in size from 200,000 square feet to over 1 million square feet, with building heights up to 30 metres. This scale and flexibility will create space  for some of the most efficient operations in the country, maximising cubic storage capacity and possibility for occupiers to deploy the latest technology. 

West Midlands Interchange will fuel a further 8,100 indirect jobs and is expected to generate around £430 million of local economic activity each year, and, through the supply chain, create over £900 million of economic activity each year nationally. 

The site benefits from good connectivity to the UK’s major cities, ports and airports, with  immediate access to the M6 motorway, allowing 88% of the population to be reached within a four hour drive, well inside the HGV single trip limit. As part of wider infrastructure improvements, Oxford and LCP will build a new link road to connect the A5 and A449, enhancing the resilience of  the local road network to improve access to the site and achieve additional public benefit. 

In addition, the project will create a new Strategic Rail Freight Interchange, which will provide  intermodal access for occupiers. This gives the site a significant competitive advantage, with rail  transport a cheaper and more environmentally sustainable option while also reducing congestion  on the roads.

The West Coast Main Line is already one of the most important freight routes in the  UK, used by 90% of all intermodal trains, and its capacity likely to be transformed by High Speed  2, the next phase of the UK’s high speed rail network linking London with the North, currently due  to open between London and Birmingham in 2026.

Sustainability sits at the heart of the site’s masterplan, which includes the creation and  maintenance of two new country parks of a combined 109 acres that will achieve a net biodiversity  gain across the development, 36% of which will comprise green infrastructure. Warehouse roofs  will be built to accommodate installation of photovoltaic panels, enabling the generation of  renewable energy. 

In 2020, Oxford announced its intention to deploy £3 billion of capital in the European logistics  sector over the next five years in platforms, developments and portfolios of scale. The company  made its first direct European investment in 2020, with the acquisition of a 15-acre site in Heathrow  alongside LCP.  

James Boadle, Head of Logistics and Residential, Europe at Oxford Properties, said in recent years, it has significantly increased its exposure to the logistics sector globally through several major transactions, including its first direct investment into European  logistics last year with LCP. "Logistics remains one of our highest conviction calls globally,  benefitting from substantial undersupply of prime new space while the growth of e-commerce and  demand for expedited supply chains continues unabated, accelerated by the effects of Covid-19," he said. “The transaction represents a rare opportunity to gain significant exposure at attractive risk adjusted returns in an increasingly competitive landscape."

Pierre Leocadio, Head of Investment, Europe at Oxford Properties, said the transaction presents an exciting opportunity to develop a market leading, prime logistics hub, alongside LCP. "Oxford is renowned for its ability to deliver major large-scale projects, and this aligns with our strategy to deploy capital at scale into the logistics sector. The inclusion of a  new rail terminal in the masterplan allows us to create a site that has strong appeal to potential  occupiers, while also helping reduce the environmental impact of its supply chain by reducing lorry  traffic. The project will also create economic impact to the region through the creation of a  significant number of local jobs.” 

John Pagdin, Head of UK Logistics Capital Partners, said it has been tracking this particular site for some time and is delighted to have secured the park. "West Midlands Interchange is a fantastic opportunity to build out a uniquely positioned development scheme, allowing us to offer occupiers every possible size, scale, configuration and  specification of unit with none of the usual planning delays or uncertainties often associated with  schemes of this nature. We look forward to progressing first stage preparatory works and  welcoming occupiers to this exciting project.”  

The site was acquired from the shareholders of Four Ashes, a three way partnership including Kilbride Holdings and Grosvenor Group’s Indirect Investment business (Grosvenor).  

Peter Frost, Director of Kilbride Holdings on behalf of Four Ashes, said: “Having successfully guided the development from its inception and earliest stages to development  consent, we are pleased that partners Oxford Properties and LCP will bring funding and specialist expertise to enable the project to now fulfil its huge potential.” 

Birmingham is in the midst of a construction frenzy with high-profile projects involving HS2 and the 2022 Commonwealth Games.

In June, HS2 launched the search for a construction contractor to build Interchange Station, which will serve Solihull, Birmingham Airport and the NEC (click here). Bidders are asked to put themselves forward for the £370m contract which could support up to 1,000 jobs at peak construction.

A significant milestone has been reached at the Sandwell Aquatics Centre, which is under construction in Smethwick, as the tiling of the main competition pool has begun (click here). To read the post-games Perry Barr Vision 2040 masterplan, click here.

Two more buildings are set to be constructed at the £700 million Paradise project in Birmingham city centre as developers launch their latest public consultation, according to a BusinessLive report.

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