London, UK; 21 January 2021
Partners Group, the global private markets investment manager, has acquired a portfolio of 27 light industrial properties in the UK with a total lettable area of approximately 3.6 million square feet, on behalf of its clients. The portfolio was acquired from specialist real estate investor Paloma Capital for GBP 253 million. Partners Group intends to scale the portfolio with an additional GBP 200 million of equity to fund new acquisitions of UK light industrial assets over the next twenty-four months.
The portfolio is spread across the UK, with most properties in the West Midlands, Yorkshire and the North West. The properties are well positioned to benefit from the structural tailwinds driving the growth of ecommerce, which has further accelerated following the outbreak of COVID-19. The portfolio has a diversified income stream with a tenant base of over 250 companies from a range of sectors, including logistics, engineering, distribution, trade and manufacturing. Paloma Capital participated in the acquisition as a co-investor and will remain the operating partner to the portfolio.
Partners Group plans various value creation initiatives for the current portfolio, including increasing occupancy, refurbishing units to upgrade and modernize facilities so they better suit tenant requirements, improving site accessibility and enhancing energy efficiency.
Rahul Ghai, Managing Director, Co-Head Private Real Estate Europe, Partners Group, states: "The UK light industrial sector is seeing high levels of demand due to the rise of ecommerce, a key transformative trend we have been following, yet shrinking supply, which is being caused by competition for land from other real estate segments such as residential. Although the Brexit transition has caused some uncertainties, we don't expect them to have a significant and lasting impact on the structural tailwinds supporting the sector."
Keeran Kang, Member of Management, Private Real Estate Europe, Partners Group, adds: "This portfolio of assets is diversified in terms of location, tenant base, asset size and offering, making it an attractive investment opportunity. The light industrial sector is one of Partners Group's top relative value propositions within real estate and this portfolio provides a great opportunity to increase our exposure to it. We are looking forward to making add-on acquisitions to the portfolio over the next two years."
Partners Group was advised by Clifford Chance and Deloitte.