PGIM Real Estate has entered into a joint venture with Kier Property, to develop a portfolio of light industrial and last mile urban logistics warehouses across the UK.
The partnership, which was signed on behalf of PGIM’s closed European value-add strategy, European Value Partners II, will have £400 mln (€480 mln) of capital to deploy and will seek to acquire sites in key urban areas and strategic logistics locations to develop them under Kier’s Logistics City and Trade City brands.
Each scheme in the joint venture will be delivered to the highest institutional specification with a strong focus on sustainability, targeting a minimum EPC rating of A and BREEAM Excellent certification.
PGIM Real Estate and Kier Property will work together to source, develop and lease the portfolio. Together, it has already secured a strong pipeline of opportunities including two developments in Bognor Regis and Knowsley and a further deal in exclusivity within Greater London.
Bognor Regis consists of 8.9-acres at Saltbox Business Park where plans are to develop 200,000 sq ft (18,580 m2) of light industrial and mid-box industrial space. At Knowsley Business Park, the venture has been selected on a 28-acre site forming part of one of Europe’s largest industrial parks.
Charles Crowe, head of UK Transactions at PGIM Real Estate commented, ‘The UK is currently witnessing record levels of industrial demand backed by the highest e-commerce penetration in Europe. This is expected to continue rising on the back of changes in consumer behaviour accelerated by Covid-19 as well as a trend towards greater supply chain resilience and increased industrial production. With this venture, we continue to focus on high conviction themes to create value for our investors.’
