M&G Real Estate, the property arm of M&G's private and alternative assets business, has purchased nine multi-let industrial assets across the UK for £165 mln (€198 mln) from Patrizia.
The new assets become part of M&G’s ‘Project King’ platform - a partnership with specialist asset management operator, M7. A portfolio of 40 units was strategically purchased in 2013 to access the small unit industrial and ‘last mile’ logistics sector in response to the rapid expansion of online retailing.
It is let to more than 500 tenants in England, Scotland and Wales and following the transaction, now has more than £450 mln in assets under management.
Said Peter Riley, head of capital solutions and UK Commercial at M&G Real Estate: 'This significant transaction complements our vision to expand the Project King portfolio and enhances our existing £3.25 bn exposure to a sector which is characterised by resilience and outperformance and is ideally positioned to benefit from existing and future structural and macro-economic trends.
'The fundamentals of the occupier market remain very positive, which should lead to continued rental growth and the sustainable, long-term returns that our client seeks.'
In partnership with M7, work on the platform has included a mixture of environmental performance upgrades, pro-active leasing of vacant space and the sale of assets with weaker green credentials. The portfolio has also proven its resilience with more than 98% of rent collected during the course of the pandemic.
Added Jamie Younger, director UK&IE transactions at Patrizia: 'For Patrizia, this deal represents the culmination of a successful six-year strategy to build a portfolio of multi-let industrial properties in solid locations across the UK, with significant value-add potential.
'We were one of the earliest institutions to identify the opportunity to buy into the urban logistics growth story back in 2014, working with specialist operator Caisson. As one of the first movers into the sector, we leveraged our knowledge, expertise and data driven approach to continually drive value through strategic capex projects.
'This has enabled us to crystalise strong returns for our investors, though we still see opportunity in the sector.'
M&G Real Estate’s total exposure to the industrial and logistics sector in the UK is £3.25 bn across 19.4 million ft2 (1.8 million m2).
