Valor and QuadReal launch EUR1 billion urban logistics JV
Valor Real Estate Partners (Valor), a pan-European logistics platform and QuadReal Property Group (QuadReal) have formed a joint venture (JV) to invest EUR1 billion in urban logistics assets located in key UK, French and German cities.
Launched against the backdrop of the Covid-19 pandemic, it underlines the continued appetite of investors for exposure to the European industrial sector and specifically urban ‘last mile’ logistics, a sector which has benefitted strongly from accelerating e-commerce growth in response to changing consumer behaviour.
QuadReal will be the majority investor in the JV, which will have initial capital commitments of EUR440 million, which with leverage, will provide in excess of EUR1 billion of investable capital. QuadReal brings its extensive experience in the sector, owning and managing over 75 million square feet of industrial buildings across North America, Europe and Asia Pacific. Valor will be responsible for sourcing and managing the portfolio, leveraging its significant experience acquiring, developing in-house and managing infill logistics assets, having grown a circa €1 billion pan-European portfolio of prime urban logistics assets in just four years and which are primarily located in the highest barrier-to-entry markets of London and Paris. Amassed on behalf of two global institutional investor mandates, Valor’s European urban logistics presence currently totals 75 assets across approximately 6 million square feet.
Employing a value-add and develop to hold strategy, the JV will focus primarily on ‘last-mile’ logistics assets located in the greater metropolitan areas of London, Paris and Berlin, with a secondary focus on major UK and EU gateway cities, such as Manchester, Lyon and Frankfurt. The JV is mandated to acquire properties across the risk spectrum, including stabilised assets, vacant or short income assets with significant repositioning potential, as well as ground-up development sites, to generate attractive risk adjusted returns.
Christian Jamison, Managing Partner, Valor, says: “The strategically important European urban, infill market continues to offer significant opportunities for nimble and fully-integrated managers to generate attractive risk-adjusted returns. There remains a critical shortage of warehouse space in major metropolitan areas close to the necessary infrastructure to meet occupiers’ requirements, an imbalance that is growing as a result of both near term drivers, such as Covid-19, as well as long term drivers, such as urbanisation. It remains however a highly fragmented and granular segment of the industrial market which requires strong local expertise as well as technical skills, which we have demonstrated over the years in building our current portfolio.”
Jay Kwan, Managing Director Europe, QuadReal, says: “We are incredibly excited to be partnering with Valor as we continue investing into the European industrial sector. Urban logistics is one of our highest conviction strategies globally given the e-commerce growth that has accelerated rapidly as a result of Covid-19 and which is forcing businesses of all shapes and sizes to ensure their distribution networks are fit-for-purpose. Valor is a fast-growing platform with proven capital deployment capabilities, and this new venture continues our strategy of working with best-in-class real estate partners with exceptional track records of generating strong returns.”