Oxford Properties Group has bought a seven-warehouse portfolio from M&G for £202.5m.
The global real estate investor acquired the seven UK logistics assets through M7 Real Estate, which Oxford acquired in September last year.
The deal increases Oxford’s weighting to larger distribution and warehouse assets in its portfolio of European supply chain infrastructure, which also includes urban infill and last-mile assets in dominant urban centres across Europe.
Alongside its big-box and urban infill holdings, Oxford is also developing new supply chain infrastructure, including West Midlands Interchange, the UK’s largest logistics project.
The M&G deal hands Oxford and M7 three single-let and four multi-let assets, comprising approximately 764,000 sq ft. The properties are spread across three of the most established UK logistics markets, with five of the assets located in London and the South East and the remaining two in Birmingham.
The portfolio is 98% occupied with a WAULT of 4.3 years to expiry and 3.9 years to break.
Oxford has plans to build M7 into a European logistics portfolio of scale, deploying more than £1bn of capital through the M7 platform in the past six months. The company has strong ambitions for its European logistics portfolio, and is targeting up to £6bn of deployment over the next three years.
Oxford’s head of investments, Pierre Leocadio, said: “This transaction kick-starts our programme to acquire larger distribution and warehouse assets, a key pillar of our pan-European logistics strategy. As a result, we are making strong, yet highly-targeted progress against one of our highest-conviction investment strategies to build a pan-European logistics business of scale.”
Logistics now represents the largest allocation of Oxford’s capital as the firm continues to build, buy and invest in the physical infrastructure that serves the expanding digital economy.
Head of logistics and residential for Europe, James Boadle, said: “This transaction yet again demonstrates M7’s ability to source and execute on high-quality opportunities in a competitive European logistics market. Its 200-person, on-the-ground team which is located across 14 European countries, gives Oxford wide access to logistics opportunities through a variety of methods, including portfolio acquisitions, single-asset aggregation and off-market opportunities. This is a competitive advantage that M7 provides which our co-investors are increasingly seeking out as they look to deploy capital into the dynamic European logistics sector.”
David Ebbrell, chief executive at M7, added: “The level of success we have achieved in our deployment activity in just six months is testament to the strength of our working relationship with Oxford and the depth of the network, as well as the experience we have established over many years. This supports our ability to source high-quality, well-located assets despite the competitive investment market and we look forward to taking on the asset management of the portfolio through which we can set about maximising any latent value.”
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