Singaporean giant Mapletree has made its long-awaited debut purchase in the European logistics market.
The real estate fund manager, which is wholly owned by state-backed investment company Temasek, has bought a $589m (£453.9m) portfolio totalling 46 assets and 9.9m sq ft of space primarily in Poland, France and Hungary from Prologis.
It has also bought a further $540m US portfolio totalling 40 assets and 6.6m sq ft of space primarily in Seattle, Dallas and Chicago.
Some 144 acres of land has been sold to Mapletree across the two continents.
Mapletree has been steadily growing its UK and European portfolio since entering the market in 2015, but has struggled to find an appropriate logistics deal. It had been in contention to buy Logicor last year from Blackstone but lost out to China Investment Corporation which ultimately paid €12.3bn (£10.5bn) and it was also involved in the process to buy Gazeley from Brookfield which was acquired by Global Logistic Properties for $2.8bn.
In an interview at the start of the year Mapletree’s regional chief executive for Europe and USA Michael Smith told EG the company would look to replicate in Europe the scale it has in Asia where it owns more than 150 logistics assets and develops warehouses in China.
“I don’t think we will be buying £5m warehouses in Milton Keynes. That’s probably not going to be our business. We would want to have a more sizeable business to augment what we have already got in,” he said.
“If we were to serve an Amazon in Asia and we want to serve them in the US and Europe, then we need to have exposure here… Of all the thematics that Mapletree is involved in, that is probably the one that resonates with us and is associated with us the most. So we very much believe in the sector and think that over time there will be a lot more opportunities for people like us to get involved.”
Mapletree’s major holdings in the UK include more than 5,500 student apartments, Green Park business park in Reading and a portfolio of prime regional office buildings such as 3 Hardman Square in Manchester and One Glass Wharf in Bristol.
There has been a surge in Singaporean investment in to the UK and Europe this year with a focus on higher yielding offices or logistics than available in their domestic markets with Ascendas REIT having now pumped £464.4m into the UK sheds market across two portfolio deals.
For Prologis, the sales to Mapletree sees it dispose of $934m of assets from co-investment vehicles and $195m in wholly owned assets meaning the company’s proceeds totalled $610m. Norges was the company’s joint venture partner on some assets in both the US and Europe. The Norwegian sovereign wealth fund recouped $182.6m from its 45% share in the US assets and €90.2m from its 50% stake in the European assets.
Michael Curless, chief investment officer, at Prologis said: “This transaction effectively completes our efforts to align our portfolio with our long-term investment strategy. Our portfolio realignment program began in 2011 and, upon completion in the fourth quarter of this year, will total approximately $14bn of building sales on an owned and managed basis.”
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