The management of Gramercy Europe, a European logistics and industrial specialist, has staged a management buyout from The Blackstone Group.
The deal was struck on Thursday last week, just days after Blackstone completed its previously announced deal to buy New York-listed Gramercy Property Trust, which in turn owned Gramercy Europe.
The independent management buyout provides a platform from which Gramercy Europe plans to launch a fourth vehicle, targeting a final close in Q1 2019, with around €400 mln of equity commitments primarily from pension funds. Gearing of up to 60% will provide firepower of €1 bn to acquire assets in Europe.
According to the company, the strategy of the new vehicle will be similar to that of Gramercy Property Europe III (GPE III), with a focus on sourcing investments through funding speculative and build to suit developments, undertaking sale-leaseback transactions and acquiring existing leased assets in the logistics and light industrial property sector, typically between €10 mln and €150 mln.
French debut
Gramercy Europe closed GPE III in September last year with €260 mln of equity commitments. Since January 2018, it has closed on €350 mln of primarily modern, single tenant net lease assets, across its core Western Europe markets. The €175 mln June acquisition of a seven-building, 282,700 m2 portfolio of logistics assets in France from Tristan Capital Partners was a major transaction which represented GPE III’s entry into the French logistics market and one of the largest French logistics portfolio transaction undertaken this year.
PropertyEU understands Gramercy is in advanced discussions on number of individual properties and portfolios and expects to close on a total of €500 mln of deals by the year end, taking GPE III to over 80% deployed.
Led by Alistair Calvert, the Gramercy Europe team – which has executed more than €2.5 bn of transactions in the last four years – will number 11 people. However, the firm intends to add more senior professionals to its ranks. It has offices in London, Barcelona, Berlin, and Jersey.
Calvert initially formed ThreadGreen Europe in 2006, launching its first fund in 2007. He subsequently the business to Gramercy Property Trust in December 2014 and stayed on to manage it.
Its target markets are France, the UK, Spain, the Netherlands and Germany. In 2017 Gramercy Europe sold a 39 asset European portfolio to AXA IM – Real Assets for over €1 bn.
Building on deep relationships
Calvert said in a statement, ‘Today’s announcement positions us to continue capitalising on both the structural changes underpinning ongoing demand from a range of occupiers, especially in the e-commerce sector, for fit-for-purpose warehouses, and also the deep relationships that we have built with some of Europe’s leading businesses, who increasingly require this type of space, as well as a variety of other stakeholders.’
He added, ‘We expect the strength of the Eurozone to provide a favourable backdrop as we deploy the remaining proceeds of GPE III and build a pipeline for 2019. Whilst we are seeing yield compression impacting on certain markets, a result of an increasingly competitive backdrop as more global money looks to access the sector, we have closed ten transactions this year where we are confident of adding value and expect to close more before the year end.’
