Marchmont chases down £250m IOS platform after deal burst

October 2023

5 Oct 2023 | by Chris Borland, REACT News

Investment manager lands three deals around London

  • What Marchmont has bought three industrial open storage sites in and
    around London
  • Why It is building a £250m IOS platform with NW1 Partners
  • What next Cam Fraser and Tim Lumsdon’s firm targeting deals between £5m and £50m in the relatively new industrial sub-sector.

Marchmont has made strides towards its target of a £250m industrial open storage (IOS) platform in the UK, after finalising a spate of recent deals, React News can reveal. Three IOS sites at London Road, Grays; Sqibb House, London Gateway; and an asset in Erith, are worth £25m and have been acquired by Marchmont. Marchmont partnered with NW1 Partners in 2022 to launch the UK’s first dedicated IOS vehicle, in a move to institutionalise what is an embryonic asset class.

We saw an opportunity to institutionalise the asset class, and to bring in programmatic capital at a national scale alongside our partner NW1 Partners.”

Cam Fraser, Marchmont

NW1 partnership
The Marchmont and NW1 Partners venture, which operates under the brand Surface, is targeting a gross asset value of £250m and has made nine acquisitions so far. Marchmont is targeting IOS sites of between two and 30 acres, with deals between £5m and £50m.

To be at the forefront of the burgeoning IOS market is an exciting opportunity

Tim Lumsdon, Marchmont

Estimates suggest there could be £16bn of IOS assets across the UK. Industrial open storage sites are highly versatile, being used as storage facilities supporting multiple industry sectors, including e-commerce, infrastructure, automotive, construction and logistics businesses. For many users, IOS is
mission-critical real estate, meaning it is an irreplaceable part of a company’s business model.

IOS assets often clustered around major cities in infill locations and transport junctions. This, along with planning controls, limits the supply of IOS space and presents a compelling supply/demand dynamic and robust residual values.

Tim Lumsdon, director at Marchmont, added: “To be at the forefront of the burgeoning IOS market is an exciting opportunity for the Marchmont business, building on our reputation in the logistics space and utilising our multi-discipline team to deliver compelling returns for our investors.”