PGIM Real Estate has teamed up with Madrid-based real estate manager Azora to invest over €150m in last-mile logistics in Spain.

The pair have launched PGIM Real Estate Última Milla, jointly funded by PGIM Real Estate’s European value-add strategy and Azora.

The companies said the newly created platform will be funded with €75m in initial equity commitments, providing a total investment capacity of over €150m, which it expects to deploy over the next 2-3 years.

The plan is to make investments in major cities like Madrid, Barcelona and Valencia. Azora will source, underwrite and manage the portfolio.

Cristina Garcia-Peri, the head of strategy and business development at Azora, said: “Being able to launch Spain’s first pure-play investment vehicle for last-mile logistics assets, alongside such a high-calibre investment partner as PGIM Real Estate, allows us to further extend our substantial and long-standing real estate investment platform.

“At a time when demand is increasing exponentially, with Spanish e-commerce penetration beginning to catch up with many other European countries, this venture will allow us to harness our expertise in the Spanish market to deliver double-digit returns on behalf of our clients.”

Nabil Mabed, the head of France, Spain and Portugal at PGIM Real Estate, said: “The Spanish last-mile logistics market is hugely undersupplied, and, following the COVID-19 crisis, the importance of on-shoring and supply chain are becoming increasingly important.

“We look forward to working alongside Azora to leverage these trends to source and deliver attractive opportunities on behalf of our clients.”

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