Ports group spies ‘untapped opportunities’ across portfolio

Associated British Ports has taken another step forward on its journey to free up more than 1,000 acres of space across its portfolio for real estate and infrastructure development. This morning (28 March) the company announced that Colliers and Lambert Smith Hampton have been appointed to market some 30 acres of land at the Port of Southampton. ABP, which also owns 20 other ports which handle a combined £150bn of trade each year, expects logistics and manufacturing companies to take the space. In 2021, ABP said it will bring forward strategic sites at 14 ports that could be used as manufacturing or logistics sites, or for renewable energy production. Earlier this year CBRE and Savills were mandated to market 468 acres at the Port of Hull. Sites at locations including Liverpool, Cardiff and Newport are also being lined up. For ABP chief executive Henrik Pedersen (pictured), who joined the company in 2018, the initiative is an ambitious move to develop a strategy away from the day-to-day business of running the ports. “We certainly don’t pretend that we have all the answers right now,” he tells EG. “But we are chasing the answers and we are investing.” The project started shortly before the onset of the pandemic. “We are blessed with good locations,” Pedersen says. “We looked at this massive land bank – that’s literally land that has not been used for 50 or 60 years – and said, ‘This smells like untapped opportunities’.” Since that realisation, the company has been “pump priming these estates”, the chief executive says. The plan is to start speculative development ahead of leasing to companies. Some of those will be manufacturing or logistics-focused companies that will benefit from close proximity to the port.  “[Tenants] get a brand new facility in a very good location and they can serve the UK from there,” Pedersen says. “We can utilise land that was really just bare scrub before, and we invest in real estate, which we want to do. And then the icing on the cake is creating jobs in an area where we need to create more good jobs.” ABP has a precedent here, and Pedersen says the company “tip-toed” into these initiatives in years gone by with a wind blade manufacturing plant built in Hull alongside Siemens. Now, the company’s agency partners will be tasked with finding more such projects.  As well as manufacturing and logistics, schemes will centre on renewable energy production that can be used by ABP itself, sold to tenants, or sold back to the grid (17 of ABP’s ports are already producing power). “We would like to target companies which have the same values as us when it comes to the environment and actually have a keen interest – either from day one, or as soon as we possibly can – in powering their site with green energy,” Pedersen says.  With shareholders that ultimately include Canada Pension Plan Investment Board and OMERS, the patient nature of ABP’s capital will help as this initiative progresses, Pedersen says. “We are not stock listed. We’re not chasing the stock price or quarterly earnings. We are not private equity owned, where it cycles over every three to five years. These pension companies truly talk long term.” And the talent in-house is ready for that conversation. “We have a lot of property people. We know how to handle estates. We just needed to make sure we commercialise the whole estate,” Pedersen says. “The land is a great asset to us and something that, from a long-term investor’s point of view, we don’t want to part with.”  To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews Image © Susanne Hakuba