CBRE GIP targets European retail, logistics for new value-add fund

CBRE Global Investment Partners (GIP), CBRE’s multi-manager, has raised $840m (€770m) from six UK, European and US pension funds for a new value-add fund.

The vehicle – the fund-of-fund platform’s first in Europe – is targeting assets in the logistics and retail sectors, both undergoing significant change as a result of e-commerce.

CBRE GIP chief executive Jeremy Plummer told IPE Real Estate that the UK, France and Spain are the fund’s main focus.

“There are clear structural consequences of e-commerce,” Plummer said. “We’ll be looking for investments where e-commerce has been positive for logistics and is still positive for retail.”

The closed-end, seven-year fund could also consider assets in the Nordics and Germany, Plummer said.

The fund, targeting co-investments and joint ventures, is expected to deliver a 15% net IRR.

CBRE GIP last year bought a portfolio of logistics assets in France for €240m.

The platform bought the 440,000sqm Nautilus portfolio in a joint venture with Arax Properties, which will manage the properties.

Plummer said the assets were bought at “below replacement cost” and would provide the fund with “attractive, cash-on-cash income”.

In the UK, the fund is investing with joint venture partners Roxhill in what Plummer described as a “rare opportunity” within London’s M25 circular motorway.

The 2m sqft Howbury Park site, near Dartford to the south east of the UK capital, has planning consent.

“It’s a unique opportunity,” Plummer said, pointing to the site’s rail and road links.

In the retail sector, the fund is targeting “internet-defensive” assets, he added.

The fund has also bought high street assets in central Madrid.

“You need to be selective when investing in retail,” Plummer said.

“There’s been a narrowing as retailers reduce their footprints for everything other than food.”