First Industrial and Panattoni Europe merge in the UK

Panattoni is realistic about the dynamics of the UK real estate market with many established players. Dudley Mitchell, Director of Panattoni Development Corporation, sets out the company's vision "The UK market has many similarities with a number of markets in which we already operate successfully. Land scarcity and lengthy approval processes mean that land is expensive. To tap into these capital-intensive markets, you have to be competitive and build speculatively. We see potential for around 280,000 square meters of new build space per year in the UK market. However, we need to expand the First Panattoni network to meet the requirements."

First Industrial was founded in 2009 and was one of the first new market players after the financial crisis. The company soon demonstrated its expertise with its first deal. This was a build-to-suit project of approximately 93,000 square meters for Marks and Spencer, which was the largest project in the UK to date with an investment of £28 million. This was followed by a number of other major projects for occupiers such as Co-op, Sainsbury and DHL. Having already proven its ability to deliver the country's largest build-to-suit projects, the company will benefit from the merger to form First Panattoni and the strategic move into speculative developments in the near future. Matthew Byrom, Managing Director of First Panattoni summarizes "We have never shied away from new and competitive markets. With the current global uncertainties and the comparative weakness of the pound, many of Panattoni's capital partners will see this as a buying opportunity. From an international perspective, the UK remains a very attractive real estate investment market with long lease terms and economically successful businesses. Added to this is the nationwide increase in rental demand and the continued growth of e-commerce, which is why interest in this sector is likely to continue."

Carl Panattoni, Chairman of Panattoni Development Corporation, summarizes "We have always wanted to expand into the UK but had not yet found the right partner. After looking closely at the market, we realized that First Industrial does very good work and shares our values and philosophy - so the merger seemed like a natural fit. First Panattoni is not only a complementary addition to our global network, it also provides a good platform to deploy existing capital and invest in the UK." red