Partners Group, a global private markets investment manager, has acquired a portfolio of 27 light industrial properties in the UK on behalf of its clients for £253m. The portfolio has a total lettable area of approximately 3.6 million square feet and was acquired from specialist real estate investor, Paloma Capital, who keep a stake in the portfolio as co-investors and will remain as operating partner of the assets.
Partners Group plans to grow the portfolio over the next two years, with a further £200m of capital to be used to fund further UK light industrial acquisitions.
The new portfolio is spread across the UK, with most of the properties in the West Midlands, Yorkshire and the North West.
The assets are expected to benefit from the current growth in e-commerce accelerated by the COVID-19 pandemic. 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.
Partners Group plans a range of value creation initiatives for the assets, including refurbishments and upgrades to modernize facilities so they better suit tenant requirements. The group will also look at improving site accessibility and enhancing energy efficiency, all of which should help drive up occupancy levels.
In an announcement released by the company, Rahul Ghai, Managing Director, Co-Head Private Real Estate Europe, Partners Group, reiterated the fact that the UK light industrial sector was seeing high levels of demand due to the rise of ecommerce, at the same time that competition for land was causing supply to shrink.”
Commenting on the impact of Brexit on the sector, Mr. Ghai said, “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, added, “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 is one of the larger private markets players globally, with $109bn in assets under management. Clifford Chance and Deloitte acted as advisers in this latest acquisition.