CR1, the first of two prime, sustainable warehouses on Croydon’s Purley Way, is available for let. The ultra-sustainable development will provide a combined total of 110,431 sq. ft. The units are revolutionary in design, far ahead of our competitors. They are 100% electric, offer 100% EV charge points, include maximum PV rooftop coverage and come with batteries included, an energy cost saving of the equivalent of £1.00 per sq ft. The 15m eaves height represents a 25% increase in interior volume over other warehouses in the area.
To learn more, we spoke with Alex Hickman, Asset Management Director at KSP (the company that manages the GLi platform), and Alex Gale, Partner at SHW and expert in Croydon’s industrial property market. They discuss why the site has the potential to be a market leader in Croydon, and how its focus on unmatched sustainability saves occupiers money on energy bills and helps grow a business.
How will CR1 help mitigate rising energy prices for occupiers?
Alex Hickman: When we launched the platform during the pandemic, competitors couldn’t understand why we were so focused on electric energy and solar panels with battery storage. What was wrong with traditional gas power and a couple of EV charge points stuck in a corner. If they don’t understand yet, occupiers do. Our team crunched the numbers this week. Our battery storage, at today’s prices, represents the equivalent of a £1/per sq ft saving in energy costs. Having solar panels on the roof is beneficial only in the daytime. But if you also have batteries to store that energy, then you can save it for later use and only take power from the National Grid when electricity is cheaper. This will really help keep costs down for future occupiers.
Alex Gale:The cost of power is a big issue now. Occupiers I’ve talked to have said their bills are more than doubling. Whereas energy costs in residential are capped, in commercial they are not. This is likely to have a big impact on running costs and affordability going forward. Anything that can be done to mitigate power costs is welcomed. CR1 offers a great step forward to tackle this issue.
Why is Croydon the right market for GLi?
Alex Hickman: GLi is focussed on investment across Greater London bounded by the M25. We’re building the portfolio at London’s key industrial and logistics hubs where we foresee strong tenant demand for quality space, for example Park Royal, Enfield, Charlton, Mitcham and Croydon. We have already received significant interest in the Queensway and Imperial Way sites from businesses which shows the demand that is there. Also, as one of only a few new builds in the area and with good connections across London and South East, CR1 is a the perfect opportunity for an ambitious business that hopes to grow.
Alex Gale: Croydon is South London's premier distribution centre. What a lot of investors have found is that, due to the lack of new build with no new stock coming forward from 2008 – 2019, there's a real need to upgrade. There's definitely been tenant demand for higher quality, and I think that demand will continue.
What trends have you seen in the Croydon industrial market?
Alex Gale: As we mentioned, there's going to be a flight to cost effective occupancy for commercial property. Businesses that have a high intensity use of power are going to have to move to more cost-effective manufacturing centres, or centres that are both insulated and have the ability for onsite power, just like CR1.
There will be a flight to quality, just as we’ve seen in the office market. Also. there'll be a lot of businesses who will be looking to improve their environment to attract and retain employees post-COVID with a focus on wellbeing. CR1 offers employee facilities including City-standard offices, air conditioning, showers, breakout spaces, landscaping, 100% EV parking and cycle storage. And, certainly, with the bigger companies, ESG and sustainability are creeping into conversations more and more, plus we've got the issue of EPCs having to be of a certain standard in 2027.
There is also the issue of volume and value for money, rents have increased over the last five years, so if you can get more cubic capacity for your money, as you can with CR1’s 15m height to eaves, then this is a very attractive offer.
How is CR1 driving change in the Croydon industrial market?
Alex Hickman: We are future-proofing our buildings - ensuring we have flexibility of space and energy supply resilience for our tenants. We will always supply at least one battery as standard and have the option for tenants to add more if required so they can increase their energy capacity.
We are also providing charge points for all cars and van parking spaces, ready for the next wave of electric vehicles. On a related note, Amazon have just announced in the UK that they are rolling out a new fleet of electric HGVs and we don’t think it will be long before others follow suit.
Alex Gale: With CR1 offering 15m eaves, this provides exactly the cubic volume that businesses are looking for – representing effective occupancy. CR1 will be exemplar both in terms of space and sustainability. It's the next industrial revolution in terms of quality, and this will attract tenants.
To learn more about GLi, click here.
The GLi platform is a joint venture between KSP and PATRIZIA that has €1 billion equity to invest in urban logistics through a sidecar to its TransEuropean VII value add fund.