PGIM Real Estate has partnered with Kier Property to invest £400m (€466m) to develop a UK portfolio of light industrial and last-mile urban logistics warehouses.

PGIM Real Estate, investing on behalf of its value-add European Value Partners II strategy, said the venture will seek to acquire sites in key urban areas and strategic logistics locations to develop them under Kier’s Logistics City and Trade City brands.

The venture has already secured a pipeline of opportunities including two developments in Bognor Regis and Knowsley and a further deal in exclusivity within Greater London, PGIM Real Estate said.

Charles Crowe, the head of UK transactions at PGIM Real Estate, said the UK is currently witnessing record levels of industrial demand backed by the highest e-commerce penetration in Europe.

“This is expected to continue rising on the back of changes in consumer behaviour accelerated by Covid-19 as well as a trend towards greater supply chain resilience and increased industrial production. With this venture, we continue to focus on high conviction themes to create value for our investors.

“We are excited to partner with Kier Property and develop a portfolio which addresses the undersupply of high-quality UK industrial and logistics assets.”

Leigh Thomas, managing director at Kier Property, said: “It’s a very exciting time for Kier Property and the JV is already creating key opportunities for our businesses to target.

“Our industrial offer includes enhanced ESG/sustainable design and renewable technologies, alongside consideration of each building’s operation and management to encourage the reduction of carbon emissions.”

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