Investcorp Real Estate is doubling down on US industrial assets, launching a venture to expand its buying power in the regional sector by around $1.5 billion, PERE has learned.
The firm, headquartered in Bahrain, with its real estate arm run out of New York, is due to announce the $526 million venture this week. The venture is backed by two unnamed sovereign wealth funds and follows an initial industrial partnership, launched in late 2021, with the same investors, the firm said.
“The US industrial sector continues to exhibit strong fundamentals, and we continue to see attractive opportunities to expand our investments in the last-mile subset of this asset class,” Herb Myers, Investcorp US real estate co-head, said in a statement. “In particular, e-commerce, the rapid growth of nearshoring trends, and US fiscal policy and government spending continue to drive record demand for last-mile facilities located near large and growing population centers.”
The venture will not be targeting big-box industrial warehouses, an asset type that saw significant new construction in recent years. Instead, it will acquire more last-mile infill locations.
All told, the two sovereign wealth funds and Investcorp have committed over $1 billion of equity over the past 2.5 years toward acquiring industrial real estate. Last September, for example, the investment manager bought a 31-property industrial portfolio in the US, spanning 1.6 million square feet for an all-in value of $216 million.
Myers said the assets the firm will target for the venture are “insulated” from the supply issues affecting industrial warehouses. The US industrial vacancy rate is expected to rise to 5 percent in the early part of this year, according to CBRE, but should fall slightly in the second half of the year.
Even so, firms remain focused on the sector. Earlier this year, Cabot Properties raised its biggest fund yet, with the firm’s leaders attributing the fund’s success during a difficult capital raising environment to the vehicle’s focus on global industrial assets. Meanwhile, in February, Bridge Investment Group launched a new vehicle to expand investor access to its industrial net lease strategy.
Industrial was also a major theme among the award-winning companies, people and deals in this year’s PERE North America awards list.
Investcorp manages $5.1 billion in industrial real estate in the US, across 43 million square feet, according to the company. Overall, 98 percent of its $9.2 billion US portfolio is with residential and industrial real estate.
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