CalSTRS makes $150m push into Northern European industrial sector

The US pension fund has agreed to invest in Dutch and Belgium logistics assets via a new joint venture as it ramps up its growing international exposure.

America’s second largest pension fund, the Californian State Teachers’ Retirement System (CalSTRS), has agreed to commit $150 million (€101 million) to a European joint venture with industrial investor First Industrial Realty Trust.

As part of the arrangement, CalSTRS will pay First Industrial fees for development, property management, leasing, dispositions and portfolio administration. In addition, First Industrial can earn performance-based fees. First Industrial will commit $17 million to the JV.

In a statement today, First Industrial said the vehicle could venture outside of the Dutch and Belgium markets if it wanted to and that it would have an initial life-span of 10 years. The total investment capacity, which is expected to be capitalized 35 percent equity and 65 percent debt, will be $475 million.

The venture will invest in assets serving a wide spectrum of customer needs such as land for build-to-suit and speculative development, or the acquisition of existing industrial facilities to be redeveloped, repositioned and leased. It will also enter into sale-leasebacks.

Rotterdam and Amsterdam represent the key industrial markets of the Netherlands, whose ports have been enjoying increased volumes of late. The Port of Rotterdam, for example, is the largest containerized cargo seaport in Europe and has reported more than 10 percent growth in volumes over the past four years.

For its part, Amsterdam's industrial market is comprised of Amstel,Southeast, Westport and Schiphol, which is the site of Europe's third largest cargo airport, Schiphol Airport.

In Belgium, the so-called “Golden Triangle” of Antwerp, Brussels, and Ghent has experienced strong demand from the logistics and distribution sectors due to its extensive rail, highway and seaport infrastructure. Antwerp is the third largest containerized cargo seaport in Europe and Brussels Airport Zaventem is among Europe’s top cargo airport.

First Industrial recently announced its expansion into The Netherlands and Belgium along with the hiring of Jan Scheers as managing director in the region.

As well as the European joint venture, the company has also revealed a Canadian industrial property joint venture with CalSTRS. CalSTRS’ investment in that vehicle is smaller than the European version, initially agreeing to commit $90 million.