German property group Patrizia has announced the final close of its GLI platform, a London urban logistics sidecar investment to its flagship discretionary value add fund, TransEuropean Property VII, with a further €750 mln to invest.
The platform, which will be operated by Patrizia on behalf of its institutional clients, is structured as a joint venture with KSP, a specialist in the logistics asset class and last mile submarket who will act as local operating and development partner.
TEP VII GLI aims to assemble a circa €1 bn portfolio of prime last-mile logistics properties in strategic locations in Greater London. These will include zones underpinned by the e-commerce mega-trend, as well as areas attracting growing occupier interest such as dark kitchens and data centres. The JV will seek to re-develop dated, and in some cases obsolete properties, typically involving ground-up development to Grade A standards in line with the highest sustainability credentials.
TEP VII GLI is targeting submarkets that are characterised by limited supply, low vacancy rates and growing demand that has been bolstered by e-commerce as the focus shifts from last mile to ‘last hour’ logistics. The Platform has already assembled a £200 mln seed portfolio of four sites in the Greater London area, including Park Royal, Croydon and Mitcham.
Paul Hampton, chairman of the TransEuropean Property series at Patrizia, commented: 'With this Platform, we now have the firepower to target one of the most exciting and rapidly growing segments of the European real assets market. The pressure for last mile delivery is only expected to grow over the near term and as the gig economy continues to expand, we also expect increasing demand from dark kitchens, data centres and the like. Many of these groups need real estate close to densely populated areas, which is in short supply.'
Including this sidecar, TEP VII reached a total equity raise of circa €1.1 bn, providing the Fund with €2.7 bn of investment firepower. Around 60% of capital has been committed since the final close and the Fund’s swelling pipeline of investment opportunities will ensure that it is fully deployed over the next 18 months.
Who is KSP?
KSP - Kingston Space Property - is a London based asset manager and developer focused on both industrial and commercial property. The company is led by CEO and co-founder David Johnson, who before KSP co-founded Chancerygate Group, a major industrial developer in the UK where he acquired and developed over £200 mln of industrial developments within the South East for major occupiers including Sainsbury, Northern Foods, Brakes Brothers and Panalux.
In 2001, he set up Space Property and working with major institutions, developed a further one million sq ft of multi-let, industrial estates throughout the South of England working with Legal and General, Blackrock, Aberdeen and Investec.
'The London industrial and logistics market is thriving,' commented Johnson. 'Our team has significant experience in the sector and a strong understanding of the needs of 21st century businesses. We are pleased to be working with PATRIZIA to deliver much-needed industrial space that supports the demands of modern society, both in terms of last mile logistics and sustainability credentials.'
