Clarion Partners raises £427m for debut UK-only logistics fund

Clarion Partners Europe, the real estate investment fund manager specialising in logistics and industrial assets, has raised £427m (€496m) at the final close of its core-plus, closed-ended UK logistics fund.

Exceeding its capital-raising target, the equity commitments have been secured from European, North American and Asian institutions, including investors in Clarion Partner Europe’s previous pan-European logistics strategies. The fund, with gearing, will provide around £650m of investable capital and is now closed to new investors.

The fund is Clarion Partners Europe’s first to solely focus on the UK, a market it recently re-entered following a seven-year break. It will target a portfolio of high-quality, ESG-compliant logistics assets “underpinned by strong rental growth fundamentals in established UK logistics hubs”, the company said.

It added that the fund has “the flexibility to invest across the asset class, from last-mile logistics to big-box single-tenant warehouses”. In addition to best-in-class assets, the fund will also target underperforming assets and selective development opportunities.

Alistair Calvert, CEO of Clarion Partners Europe, said: “This is an opportune time to be scaling up in the UK, a market with strong long-term property fundamentals and where we have deep experience, and which is witnessing a pricing adjustment the likes of which hasn’t been seen in at least the last 30 years.

“We focus on delivering strong investor returns by identifying the industrial sector’s evolving trends and tailoring our strategy accordingly. Having amassed a portfolio of highly sustainable product that meets the demand of today’s occupier on the continent, we are convinced we have the local, on-the-ground origination and asset management expertise to replicate this in the UK.”

Rory Buck, head of investment at Clarion Partners Europe, added: “Significant rental growth in recent years means many existing properties have baked in reversion and lease rent review mechanics, which provides investors the ability to capture this regardless of lease length. Additionally, our specialisation in the industrial sector allows us to enhance certainty of execution to potential sellers which contributed to completing two transactions in the UK last year.”

To read the latest IPE Real Assets magazine click here.