Alistair Calvert, the CEO of Gramercy’s European arm, has led a management buyout of the business from new owner Blackstone and launched a €1bn fund.
In May this year, Blackstone Real Estate Partners VIII agreed to buy Gramercy Property Trust for $7.6bn (€6.56bn).
The management of Gramercy Europe said it has completed the acquisition of the business from Blackstone, following the latter’s acquisition of Gramercy’s US parent company.
The buyout provides the platform from which Gramercy Europe will launch a fourth vehicle, targeting a final close in the first quarter of 2019, with around €400m of equity commitments, primarily from pension funds.
Gearing of up to 60% will provide potential firepower of €1bn, Gramercy Europe said.
The strategy of the new vehicle will be similar to that of Gramercy Property Europe III (GPE III), with a focus on sourcing investments through funding speculative and build to suit developments, undertaking sale-leaseback transactions and acquiring existing leased assets in the logistics and light industrial property sector, typically between €10m and €150m.
Calvert said: “Over the past four years the Gramercy Europe management team has been able to consistently extract significant upside on behalf of its investors through identifying, acquiring, managing and disposing of typically modern, single-tenant properties in key logistics conurbations throughout Western Europe.
“Today’s announcement positions us to continue capitalising on both the structural changes underpinning ongoing demand from a range of occupiers, especially in the e-commerce sector, for fit-for-purpose warehouses, and also the deep relationships that we have built with some of Europe’s leading businesses, who increasingly require this type of space, as well as a variety of other stakeholders.”
Gramercy said it is in advanced negotiations on a number of individual property and portfolio acquisitions and expects to exceed a total of €500m of acquisitions by the year-end, taking GPE III to over 80% deployed.
“We expect the strength of the Eurozone to provide a favourable backdrop as we deploy the remaining proceeds of GPE III and build a pipeline for 2019.
”Whilst we are seeing yield compression impacting on certain markets, a result of an increasingly competitive backdrop as more global money looks to access the sector, we have closed ten transactions this year where we are confident of adding value and expect to close more before the year-end.”