Global real estate investment and asset manager AEW has launched a new urban logistics and light industrial strategy called ULLIS with €475 mln of start-up equity.
The platform is structured as a scalable partnership, targeting the development of an initial portfolio of circa €800 mln. The investors that have committed to the platform are long-term partners of AEW in the logistics sector and include PGGM, Allianz Real Estate and Crédit Agricole Assurances.
ULLIS aims to build a core portfolio focused on urban logistics and light industrial assets in major metropolitan areas of France, Germany and the Netherlands. The majority of equity is expected to be deployed across brownfield build-to-core developments, which will be supported by the acquisition of some income producing assets.
The effects of structural trends supporting demand for industrial space across urban locations are likely to intensify further through growing urbanisation, the rise of urban distribution, as well as the development of industry 4.0 and emergence of partial industrial reshoring towards Europe. In this context, ULLIS will create a platform to meet the urban space requirements of the new generation of industrial companies and logistics providers.
ULLIS extends AEW’s existing €4 bn pan-European logistics portfolio allowing investors to leverage the firm’s networks and access light industrial at scale.
‘The pace of change is accelerating, fuelled by the impact of new technologies, and market demand for industrial space within dense urban areas is growing,’ said Rémy Vertupier, co-head of Institutional Fund Management, Separate Accounts & Club Deals at AEW. ‘Considering the high occupancy levels across existing stock and restricted new supply, we decided to launch ULLIS with a strategy mainly focused on the development of small to large urban projects through the conversion of obsolete outdated buildings and the regeneration of brownfield land into new, high-quality light industrial and logistics facilities. Combined with AEW’s longstanding commitment to ESG objectives, we believe this strategy will positively contribute to the development of cities, and generate sustainable performance for our investors.’
2020 was a record year for logistics take up in Europe, with over 26 million m2 of space being leased,, up 12% on the level observed during 2019 and 19% above the five year average. The front running country, Germany, accounted for 6.8 million m2 of demand, up 3% on the five year average, and accounting for 26% of Europe’s total take up, according to new research from broker Savills.
