Valor, QuadReal form €1bn urban logistics joint venture

Valor, QuadReal form €1bn urban logistics joint venture
Christian Jamison, Managing Partner, Valor

Pan-European logistics platform Valor Real Estate Partners (Valor) and QuadReal Property Group (QuadReal) have formed a joint venture to invest €1 billion in urban logistics assets located in key UK, French and German cities.

The joint venture will focus primarily on ‘last-mile’ logistics assets located in the greater metropolitan areas of London, Paris and Berlin, with a secondary focus on major UK and EU gateway cities, such as Manchester, Lyon and Frankfurt. 

”Launched against the backdrop of the Covid-19 pandemic, it underlines the continued appetite of investors for exposure to the European industrial sector and specifically urban ‘last mile’ logistics, a sector which has benefitted strongly from accelerating e-commerce growth in response to changing consumer behaviour,” said in the statement.

QuadReal will be the majority investor in the JV, which will have initial capital commitments of €440 million, which with leverage, will provide in excess of €1 billion of investable capital. 

Valor will be responsible for sourcing and managing the portfolio, leveraging its significant experience acquiring, developing in-house and managing infill logistics assets, having grown a circa €1 billion pan-European portfolio of prime urban logistics assets in just four years and which are primarily located in the highest barrier-to-entry markets of London and Paris.

The joint venture is mandated to acquire properties across the risk spectrum, including stabilised assets, vacant or short income assets with significant repositioning potential, as well as ground-up development sites, to generate attractive risk adjusted returns.

“The strategically important European urban, infill market continues to offer significant opportunities for nimble and fully-integrated managers to generate attractive risk-adjusted returns. There remains a critical shortage of warehouse space in major metropolitan areas close to the necessary infrastructure to meet occupiers’ requirements, an imbalance that is growing as a result of both near term drivers, such as Covid-19, as well as long term drivers, such as urbanisation. It remains however a highly fragmented and granular segment of the industrial market which requires strong local expertise as well as technical skills, which we have demonstrated over the years in building our current portfolio,” said Christian Jamison, Managing Partner, Valor.

“We are incredibly excited to be partnering with Valor as we continue investing into the European industrial sector.  Urban logistics is one of our highest conviction strategies globally given the e-commerce growth that has accelerated rapidly as a result of Covid-19 and which is forcing businesses of all shapes and sizes to ensure their distribution networks are fit-for-purpose.  Valor is a fast-growing platform with proven capital deployment capabilities, and this new venture continues our strategy of working with best-in-class real estate partners with exceptional track records of generating strong returns,” said Jay Kwan, Managing Director Europe, QuadReal.