AEW Europe, the Paris-based private equity real estate firm, has followed its double purchase of warehouse investments in continental Europe, with the purchase of more warehouses in London.
The firm said in a statement it had bought four assets across West London and Heathrow from London listed REIT Brixton for £70.25 million ($106 million; €78 million). The deal reflected a net initial yield of 8.05 percent.
The investment comes quick on the heels of a pair of warehouse investments made by the firm on the continent earlier this week. In those deals, AEW Europe bought seven warehouses across Germany and The Netherlands from ProLogis European Properties for €119.5 million, and a €16 million warehouse in France from Goodman.
The purchase of the Brixton properties, all of which have been let to single tenants, was made on behalf of AEW Europe’s European Property Investors Special Opportunities Fund(EPISO). The fund’s strategy of late has been to purchase prime logistics buildings let on long leases to what it regards as having “sustainable (lease) covenants.” The properties bought from Brixton are let to Kuehne & Negal, Royal Mail, CEVA Logistics and the Metropolitan Police.
Ric Lewis, AEW Europe’s former chief investment officer, whop retired from the role last year but stayed on to manage the fund as well as other AEW Europe vehicles, said: “This deal reflects exactly the type of opportunity we expected to emerge due to the dislocation in real estate markets caused by the credit crisis and was the rationale behind the launch of the EPISO Fund.”
“We hope to be able to work with other partners in the market such as Brixton, where there are difficulties managing debt, or other structural portfolio problems that need to be solved in extremely challenging economic times.”