BlackRock in £150m UK industrial JV

The world’s largest asset manager has teamed up with UK-focused logistics real estate firm Canmoor to buy properties valued at between £5 million and £15 million.

BlackRock Real Estate, the real estate investment management business of the world’s largest asset manager, BlackRock, has bought into a portfolio of logistics properties in the UK and has formed a partnership with a local operator to buy more.

BlackRock said it has formed the partnership with a logistics specialist called Canmoor, with which it intended to assemble a portfolio of up to £150 million (€188.55 million; $240 million) in assets. BlackRock will “maintain oversight” of the investment strategy, with Canmoor providing management of the portfolio as well as assisting in seeking out new deals. Canmoor is a 10-year-old company with about 11 million square feet of property on its books currently.

To hold the assets, BlackRock has launched the BlackRock Industrial Trust, a wholly-owned subsidiary of its BlackRock UK Property Fund, a core vehicle that currently contains £2.9 billion of assets. That trust has been seeded with a £60 million portfolio of eight assets acquired from Canmoor. Further acquisitions of between £5 million and £15 million are expected to follow.

Justin Brown, managing director and portfolio manager of the BlackRock UK Property Fund, said: “At a time when the UK economic recovery is gradually gaining momentum, we expect the industrial sector to continue delivering strong performance.”

Brown added: “Smaller estates in particular will provide significant opportunities for yield. Canmoor is a best-in-class operator, and the team is very well positioned to unlock value in this market.”

Martin Smith, an executive at Canmoor, said: “We are delighted to be part of BlackRock Industrial Trus, which we aim to build into a market leader. The initial acquisitions provide quality income in established locations, and we firmly believe that this sector of the industrial market is primed for rental growth.”