PGIM and M7 launch €100m value-add German logistics joint venture

PGIM Real Estate and M7 Real Estate, the pan-European investor and asset manager, have launched a €100m joint venture to invest in value-add industrial and logistics assets in Germany.

The joint venture will target industrial and logistics assets in prime locations across Germany, focusing on assets that require repositioning through redevelopment and leasing in order to add value.

To date, the venture has acquired two assets for in excess of €40m in total. The first asset comprises a property in Mulheim, which is 75% let to two occupiers and provides the opportunity to lease up the vacant space and develop an additional 10,000sqm unit. The second is a multi-unit logistics park situated in Munster that has been acquired via a short-term sale and leaseback. The venture plans to refurbish and re-let the building. The joint venture continues to seek to build a strong future pipeline of opportunities of single and multi-let industrial and logistics assets, the partners said.

PGIM Real Estate has invested in the joint venture on behalf of its European value-add strategy, for which urban logistics represents approximately 40% of its portfolio.

Nabil Mabed, senior portfolio manager of European value-add strategy and head of France, Spain and Portugal, said: “The correction in European real estate values over the last two years has been more acute than in any other region, and we have now reached a historic entry point.

“Logistics and industrials in prime locations continue to demonstrate strong market fundamentals and attractive value-add opportunities, but it is more important than ever to be selective when investing capital.

“With M7’s deep knowledge and expertise in light industrial and last mile logistics, we are confident this joint venture will provide investors with access to a high-quality German industrial portfolio.”

This JV builds on M7’s extensive track record of building and managing market-leading European portfolios and aims to capitalise on the continued occupier demand in the sector, the manager said.

John Pow, managing director of M7 Real Estate, added: “We have continued to see demand for German light industrial and last mile logistics assets from occupiers and investors alike. The sector has remained resilient, and we firmly believe that rents will continue to grow for well-specified and well-located assets within the sector over the coming years. We are excited to work with our new partners, PGIM Real Estate, on this strategy and are confident we can assemble a market-leading portfolio over the coming months.”

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