London-based Europa Capital has teamed up with recently-formed M7 Investment Management for a joint investment program targeting UK industrial real estate.
In an announcement, the partners said they planned to acquire more than £130 million ($216 million; €144 million) in light industrial assets across the country through a vehicle called The Light Industrial Property Partnership (LIPP). M7 has been appointed asset manager of the vehicle’s investments.
This week, LIPP kick-started its spending spree by buying three industrial estates at Milton Keynes, Tewkesbury and Didcot for £15 million. The purchases reflected a net initial yield of more than 10 percent. The vehicle has a further £30 million of assets currently under offer.
Noel Manns, principal of Europa, said: “We believe in the long term fundamentals of multi-let industrial estates in the UK although we are being selective in our purchases, as we believe the occupier market will remain weak for at least the next 24 months.
“Without very hands on active management, this asset type will not perform in the short term. We believe that M7’s very focused asset management capabilities will deliver out-performance.”
M7 was formed at the end of April by former executives at industrial outfit GPT Halverton including founder and chief executive Richard Croft.