AEW and Allianz Real Estate’s develop-to-core UK logistics venture has bought a £50m (€56m) logistics scheme from Caddick Development.

The Allianz-owned separate account vehicle managed by AEW is buying Wakefield 515, West Yorkshire, a 515,000sqft logistics facility in Yorkshire.

Work is expected to start on the 28-acre site this month with completion targeted for the third quarter of next year.

AEW said the €290m venture, which was formed in March last year, now has approximately 1m sqft of completed developments.

Nick Winsley, managing director and head of investments at AEW UK investment management, said: “This acquisition represents an excellent opportunity. With the UK demonstrating historically strong take-up, occupancy levels and rental growth and with very little new Grade A supply in the Yorkshire market over 200,000sqft, the timing is right for this development at Wakefield 515.

“A number of prospective tenants have already expressed interest in the facility, which, when complete will be one of the largest speculative buildings of its type anywhere in the UK.”

Winsley said the latest deal is the venture’s third project since its launch last year and it continues to seek further opportunities in established core logistics locations throughout the UK.

Kari Pitkin, head of business development for Europe at Allianz Real Estate, said: “The UK offers excellent opportunities on a select basis and we will continue to target those offering long-term, stable cash returns.

”Looking forward, we expect the logistics sector to continue benefitting from strong market fundamentals such as the continued growth of online shopping. We see this transaction as an excellent opportunity to capitalize on that.”

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