Sunrise Real Estate has begun work on a major refurbishment of the former European distribution centre of US retail giant Gap in Rugby, after completing the acquisition of the site last month, CoStar News can reveal.

The 661,000-square-foot prime distribution warehouse unit is located in a key logistics location in the Golden Triangle, just off Junction 1 of the M6 with quick access to the M1.

The works are designed to improve the environmental and social sustainability of the Rugby 661 building and include a 35,000-square-foot CAT A office refurbishment, mechanical and electric upgrades including LED lighting, new dock doors and roof, as well as new employee wellness areas providing the building with an expected EPC rating A & BREEAM Very Good accreditation. The works will also include air source heat pumps and installation of additional EV charging points.

The refurbishment is scheduled to complete in the second quarter of 2023 with early access for potential tenants starting in January.

Jenny Wang, chief operating officer and head of asset management at Sunrise, said in a statement: “We are really pleased to complete on the purchase of Rugby 661 and start our comprehensive refurbishment programme. We are investing significant capital to deliver a high-quality, environmentally and socially sustainable distribution warehouse facility to the Golden Triangle at a time when there is a clear lack of immediately available stock of this calibre.”

Agents for Sunrise are DTRE and Cushman & Wakefield.

Sunrise is a privately-owned real estate investment management company headquartered in London. As at 30 September, 2022, Sunrise manages a portfolio of 70 logistics properties with a lettable area of approximately 20 million square feet. It invests in high-quality logistics properties in key European and UK markets through acquisitions and development, with what it terms a "focused value-driven approach and hands-on asset management to ensure long-term value creation".

US clothing retail giant Gap announced it was considering closing the distribution centre in 2020 as it announced a strategic review of its European businesses.

The company, which became a big hit in the UK after opening its first store in 1987, confirmed in September last year that it planned to close all its 81 stores in the UK and Ireland and go online-only.

The firm said it would close all its stores "in a phased manner" between the end of August and the end of September 2021.

The firm said it was "not exiting the UK market" and would continue to offer a web-based store. It subsequently a joint venture franchise relationship with UK fashion giant Next under which the latterwould manage its e-commerce business in the UK as well as Gap-branded shops-in-shops at Next locations.

Gap sold the freehold interest in Rugby 661 with vacant possession for an undisclosed price.