Allianz and AEW kickstart sheds venture with first UK deal

AEW said that it had purchased a 525,000 ft2 (50,000 m2) speculative development in the East Midlands region from CWC Group for an undisclosed sum.

Situated at the East Midlands Distribution Centre (EMDC), the site has been acquired with planning permission for a Grade A warehouse with office accommodation, due for pratical completion in December 2019.

'We are delighted to be investing in the first development in our new UK logistics venture and expect to be making further announcements in the coming weeks,' said Nick Winsley, managing director at AEW UK Investment Management.

Located next the the 1 million ft2 M&S national distribution centre, the site benefits from good rail and road links, the parties said. It stands less than 8 km from East Midlands Airport, the UK's second largest freight traffic airport.

Charlie Royle, director at AEW UK Investment Management, said that the firm had already received enquiries of interest from a number of tenant prospects. 'When complete this facility will be one of the largest speculative buildings of its type anywhere in the UK and will provide occupiers choice in this supply starved market,' he added.

Allianz unveiled the investment partnership with AEW in March of this year, describing it as a new 'develop-to-core strategy focused on funding speculative developments within the UK logistics sector'.

The venture, an Allianz-owned separate account vehicle managed by AEW, will focus on units of 200,000 ft2 or larger in prime locations in the UK. The venture is being managed by Allianz Real Estate on behalf of Allianz group insurance companies, who have committed €290 mln to date.

'With the favourable backdrop of limited availability and increasing tenant demand for larger format warehouses, AEW and Allianz Real Estate have identified a clear opportunity to build a portfolio of core assets in the UK,' said Olivier Téran, chief investment officer, Allianz Real Estate.