EUROPE/UNITED STATES - Cabot Properties is planning to expand its industrial acquisition efforts into Europe for the first time.
The firm typically buys distribution warehouses in the US but officials believe the asset class is looking favourable in Europe and the move will allow the company to diversify its geographical presence.
Cabot has also seen some of its US competitors, such as AMB Property Corporation and ProLogis, do well by expanding into the European market over recent several years, so Cabot is looking at the possibility of investing in France, Germany, the Netherlands and the UK.
The European expansion will be financed through the Cabot Industrial Value 3 commingled fund which recently raised $680m (€531.4m).
New York State Teachers Retirement System is one of its investors after officials approved a commitment of up to $50m, providing it did not amount to more than 20% of the total capital raised.
Up to 10% of Industrial Value 3 can be invested outside the US whereas in previous commingled funds investment was only allowed beyond the US in Mexico and Canada.
Gross IRRs for investors in the fund are projected to be in the range of 16-18%, and the eight-year fund has 65% leverage with a four-year investment period.
Cabot currently has six US-based assets in the fund worth $80m: three in Chicago, and one each in Atlanta, Baltimore and Cincinnati.
Cabot will mostly invest in existing value-added warehouse distribution properties and up to 30% of the assets in the commingled fund can involve developments.