Oxford Properties Group (“Oxford”), a leading global real estate investor, asset manager and business builder, has acquired two portfolios containing a combined 57 urban logistics and light-industrial assets from funds managed by M7 Real Estate for €360 million (~CAD$526 million).
The investment progresses Oxford’s plan to deploy greater capital into higher conviction investment strategies. Which includes growing its exposure to global logistics where it continues to invest in, build and buy the physical infrastructure that serves the digital economy. M7 Real Estate will continue to asset manage the portfolios on behalf of Oxford, as part of Oxford’s strategy to back and build a series of world class real estate businesses with world class management teams.
The 2.41M SF (223,800 sqm) Danish portfolio, comprising 27 urban logistics and light industrial assets, is Oxford’s first acquisition in the Nordics. By value, 50% of the portfolio is located in Greater Copenhagen with a further 22% in Denmark’s Triangle region, an established logistics location that serves all major Danish population centres and the German border, due to its central location. The occupier base is well diversified across approx. 75 tenants, with the majority operating in the transport & distribution (3PL), e-commerce & retail and manufacturing sectors.
The French portfolio comprises 1.82M SF (169,000 sqm) of urban logistics and light-industrial space, with the large majority of the 30 assets located in the Greater Paris area and the remainder situated along the north-south logistics corridor through central France. The income streams are well diversified, underpinned by 120 occupiers ranging from SMEs to large corporations.
Across both portfolios there is significant opportunity to drive further value from the assets through active asset management to modernise the properties, improve occupancy, strengthen the income profile of the portfolios and increase the sustainability performannce of the assets.
As a result of its investment activity over recent years - including last month’s purchase of a US$2.2 Billion (~CAD$2.74 billion), 149-asset U.S. light-industrial portfolio from KKR - logistics now represents the largest allocation of Oxford’s captial within its global real estate portfolio.
James Boadle, Head of Logistics and Residential, Europe at Oxford Properties, commented: “These acquisitions provide us with a significant addition to our European industrial and logistics portfolio and reflect our strong ambitions in this high conviction sector. We believe that the tailwinds and increased focus on supply chains supporting the sector will continue to drive demand and therefore rental growth in the future.
“These acquisitions provide immediate scale in France and make our first investment into the Nordics, a region with strong market fundamentals, where we continue to look for further opportunities. With M7 continuing to asset manage the properties, we are well positioned to drive value at these assets.”
David Ebberell, CEO of M7 Real Estate added: “[Having acquired and assembled these portfolios of previously underperforming assets on behalf of clients between 2017-2019, we have already undertaken an intensive asset management plan to improve occupancy and deliver a much higher quality collection of properties; while also delivering on behalf of our investors with these realisations. There is still more we can do and we look forward to continuing with our efforts to maximise the portfolio’s return potential as asset manager.”
Pierre Leocadio, Head of Investments, Europe at Oxford Properties, commented: “Copenhagen and Paris, where the majority of these portfolios are located, benefit from large economies and a stable demand base, as well as central locations in European supply chains which are themselves of increasing importance post COVID. As e-commerce penetration accelerates, well located logistics space continues to be both constrained and in high demand, supporting our conviction in the asset class in key markets globally.”
Oxford was advised by BNP and DLA Piper on France and CBRE and DLA Piper on Denmark. In France Oxford was also advised by Lasaygues and Bredin Prat on notary and tax respectively. M7 were advised by Eastdil on France and Denmark with Simmons & Simmons and Accura advising them on France and Denmark respectively.