PGIM Real Estate grows European debt portfolio in logistics and last-mile
PGIM Real Estate continued to build its European senior loan portfolio in the logistics and industrial sectors, providing financing for three separate portfolios across the UK and Continental Europe, in the fourth quarter of this year.
PGIM Real Estate is the real estate investment and financing business of PGIM, the USD1.4 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU).
PGIM Real Estate has provided loans of GBP31.95 million, for the financing of a multi-tenanted industrial and logistics property portfolio in the UK, and GBP95 million to refinance nine freehold logistics assets in the UK. In addition, it has provided a loan of EUR131.5 million for the financing and acquisition of a light industrials and logistics portfolio in the Netherlands.
The senior debt team continues to demonstrate its expertise and market knowledge in logistics and last-mile, against the backdrop of increasing online-retail-related demand and a shifting trend for industrial companies to carry larger and more robust inventories as part of their supply chain management. PGIM Real Estate’s European debt platform is GBP5 billion AUM, which includes a senior loan portfolio of over GBP4 billion AUM across the UK and Continental Europe.
Andrew Macland, head of European Debt, says: “With these loans, we continue to strengthen our debt platform and build an attractive portfolio of senior loans in logistics and light-industrial, across the UK and Continental Europe. Using the global reach and expertise of PGIM Real Estate, we are able to execute transactions across the full spectrum of industrial assets, taking advantage of the strong positive long-term fundamentals and meeting investor demand for the asset class. These loans demonstrate our ability to support sponsors through market uncertainty, and maintain a strong pipeline of opportunities in Europe.”
This portfolio comprises 463,345 sq ft of multi-tenanted industrial and logistics space across four sites; two in Greater London and two in the North West, each in low vacancy sub-markets. The freehold assets are well connected to local transport networks and within close proximity to dense population centres so as to benefit from the structural trend of increasing e-commerce adoption and the need for last-mile delivery operations. All the properties have been built or refurbished in the last 13 years and are 97 per cent occupied.
The nine freehold assets, totalling 1.3 million sq ft, are functional buildings situated in mid to large industrial estates in the UK. Five of the assets are located in the Midlands, an important industrial and logistical hub for the UK, with transportation links enabling access to over 90 per cent of the UK within four hours. Of the remaining assets in the portfolio, one is located in the North East, and a further three in London and South East.
The portfolio consists of 12 multi-let light-industrial assets and five larger logistics assets in the Netherlands purchased by Urban Industrial. The light-industrial properties are situated in the Randstad region, a major metropolitan area of the Netherlands home to c7.1 million people. Of the logistics properties, three of the assets are in Randstad, with the remaining two serving regional geographies from Zwolle and Den Bosch. The portfolio has a low vacancy rate, with the largest occupier being the country’s top provider of postal and parcel service.