Oxford Properties has progressed its direct logistics investment strategy in Europe via a new UK venture with Logistics Capital Partners (LCP).
The C$70bn (€47.bn) property arm of Canadian pension fund OMERS and LCP’s new co-investment joint venture has bought a 734-acre site near Birmingham to develop a logistics hub with associated rail freight terminal known as West Midlands Interchange.
The site was acquired from Four Ashes, a partnership including Kilbride Holdings and Grosvenor Group’s indirect investment business.
Oxford Properties and LCP will jointly invest £1bn (€1.2m) to bring forward the project over a number of years.
Oxford Properties, which plans to invest £3bn of capital in the European logistics sector over the next five years, is providing the majority of the capital for the project.
Last year, Oxford Properties announced its plan to deploy capital in the European logistics sector over the next five years in platforms, developments and portfolios of scale.
The OMERS subsidiary made its first direct European investment in 2020, with the acquisition of a 15-acre site in Heathrow alongside LCP.
Earlier this year, Oxford Properties announced it is buying European fund manager M7 Real Estate, which manages about €4bn of assets on behalf of third-party investors.
Oxford Properties manages a portfolio of industrial real estate across North America, Europe and Asia Pacific. The company has had exposure to European logistics since 2018 and had invested through logistics vehicles with assets in the UK, Germany and France.
James Boadle, the head of logistics and residential, Europe at Oxford Properties, said: “In recent years we have significantly increased our exposure to the logistics sector globally through several major transactions, including making our first direct investment into European logistics last year with LCP.
“Logistics remains one of our highest conviction calls globally, benefitting from substantial undersupply of prime new space while the growth of e-commerce and demand for expedited supply chains continues unabated, accelerated by the effects of Covid-19.”
Boadle said the latest transaction represents a rare opportunity to gain significant exposure at attractive risk-adjusted returns in an increasingly competitive landscape.
Pierre Leocadio, the head of investment, Europe at Oxford Properties, said: “The inclusion of a new rail terminal in the masterplan allows us to create a site that has strong appeal to potential occupiers, while also helping reduce the environmental impact of its supply chain by reducing lorry traffic.
“The project will also create economic impact to the region through the creation of a significant number of local jobs.”
John Pagdin, the head of UK Logistics Capital Partners, said, “We have been tracking this particular site for some time and are delighted to have secured the park alongside Oxford Properties.
“West Midlands Interchange is a fantastic opportunity to build out a uniquely positioned development scheme, allowing us to offer occupiers every possible size, scale, configuration and specification of unit with none of the usual planning delays or uncertainties often associated with schemes of this nature.”
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