Patrizia has launched the GLI platform, a London urban logistics investment vehicle.
The new GLI platform sits alongside Patrizia’s discretionary value add fund, TransEuropean Property VII LP(TEP VII) fund, as a sidecar and is starting with a circa €240 million seed portfolio.
The platform aims to invest a further €750 million in assets on behalf of its institutional clients.
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 billion 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 million 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.”
“The popularity of the platform with investors is testament not only to our strategy but the faith our clients have in the operating partnership between Patrizia and KSP. Working alongside our local partner, we are excited about the opportunity to create value together and build a portfolio of truly firstclass assets in the coming years. Given the trends underpinning this strategy are pan-European, we may look to replicate this approach elsewhere in Europe in the future.”
David Johnson, Chief Executive Officer at KSP, said: “The London industrial and logistics market is thriving. 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.”
Including this sidecar, TEP VII reached a total equity raise of circa €1.1 billion, providing the fund with EUR 2.7 billion 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.