AXA IM Alts splashes out on 1.9m sq ft of sheds

AXA IM Alts has bought the 1.9m sq ft Hercules logistics portfolio for £390m. The alternative investor, which has €183bn (£152bn) AUM, bought the nine existing buildings and one development project from a joint venture between Goldman Sachs and Canmoor. The transaction was made on behalf of clients through AXA IM Alts’ Real Assets platform, which was INREV’s leading real estate portfolio and asset manager in Europe for 2021. The deal represents a 3.1% net initial yield. The portfolio comprises a combination of predominantly grade-A last-mile and regional modern logistics warehouses situated near major motorways. The development site will be acquired upon completion. Around half of the portfolio is located within the Golden Triangle, with 16% of the properties located in the South East, and the remainder located in prime Midlands and Manchester markets. Stuart Carr-Jones, head of UK & Ireland transactions, AXA IM Alts, said: “This is a unique opportunity to acquire a high-quality and well-let portfolio of scale in some of the most strategic UK logistics micro-locations, and in a sector in which we retain our long-held conviction. Demand for modern warehouse space remains robust, driven by the growth of e-commerce, multi-channel retail and global business-to-business distribution, and we look forward to leveraging our asset management and capex programmes to capture the portfolio reversion, grow income and ensure the continued creation of value for our clients over the longer term.” Goldman Sachs Asset Management and Canmoor pieced the portfolio together in four separate deals between late 2020 to mid-2021. During the hold period, Goldman Sachs Asset Management completed a number of strategic asset management initiatives across the portfolio, including the development of a 170,000 sq ft unit at Omega Business Park, Warrington, and the signing of a 17-year reversionary lease at Unit 4500, Magna Park. it also implemented a number of ESG-related improvements across the portfolio. Farbod Nia, an MD in GSAM’s real estate business, said: “This transaction demonstrates our ability to identify sectors offering attractive fundamentals, while being nimble in adapting to market conditions to maximise performance for our investors. We would like to thank Canmoor for their partnership, and look forward to continuing our investing efforts together.” Around half of the total area has an EPC rating of A or B, and all other assets being rated C or above. AXA IM Alts intends to pursue a number of initiatives aimed at further increasing the energy efficiency of the portfolio where needed. Almost all the assets in the portfolio are fully leased with an average lease length in excess of seven years. AXA IM Alts plans to utilise its asset management expertise to further upgrade the assets and unlock identified portfolio reversion. The deal represents a major expansion of AXA IM Alts’ exposure to the UK logistics market, and brings its global direct equity logistics platform to over 7m sq m across 15 countries, and a total value of €11bn across its global direct equity and debt platforms. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Discover which agents are transacting the most industrial space across the UK >>