Arlington is to roll out a €400m (£270m) European logistics fund to follow its fully invested Celogix 1.
The fund manager is looking to build up a seed portfolio worth around €40m (£27m) for Celogix 2 before launching at the end of the year.
Managing director Rob Wilkinson said: “We are looking at a value-added approach to the fund, buying properties under development or properties that are not fully let.
“There is a lot of investor demand in logistics.”
The fund will invest in European industrial warehouses, focusing on Italy, France and Spain.
Wilkinson said that through Arlington’s Paris office the company had identified a pipeline of over €300m (£203m) off-market products across different sectors.
One is already under offer, with another 10 being actively pursued.
Celogix 2 will be a Dutch tax-transparent vehicle targeting an internal rate of return of around 12%. It will carry gearing of up to 60%.
Arlington is also developing a third Celogix fund to target central European property.
Wilkinson said the fund was at a very early stage but would target a higher market risk profile offset by lower individual property risk.
Arlington will look to co-invest around €5m (£3.3m) in the new funds.
References: EGi News 19/09/05
