Ivanhoé Cambridge has bought into an existing joint venture focused on making logistics real estate investments in the UK.
The real estate platform of Canadian pension fund manager Caisse de dépôt et placement du Québec has formed a partnership with Peel Logistics Property, itself a venture between UK property company Peel Holdings and Macquarie Capital, the capital advisory business of Australian bank Macquarie formed in 2015.
With equity and debt included, the capital investment in the venture, named Peel Logistics Property UK Logistics Venture, is understood to be approximately £1 billion ($1.34 billion; €1.19 billion) with Ivanhoé Cambridge owning 80 percent and the remainder constituting a co-investment from Peel Logistics Property.
PERE understands the venture borrows development finance at a loan-to-value ratio of between 50-60 percent, indicating that the Canadian institution’s equity commitment to the venture is between £320-£400 million.
Ivanhoé Cambridge buys in more than two years since Peel and Macquarie formed their venture with the ambition of growing a £1 billion portfolio. At the time, the equity available to the venture was “measured in the tens of millions of pounds” according to PERE’s reporting at the time, making this investment something of a game changer for it.
The new set up will be seeded with a trio of properties developed by Peel Logistics Property in Manchester and Liverpool and a development site in Sheffield which can hold more than 800,000 square feet of lettable space. While the initial outlays have happened in the north of the UK, the venture’s strategy is nationwide.
Jeremy Greenland, Peel Logistics Property’s chief executive officer, said the capital would be deployed via development, but also core and value-added risk and return profiles. “UKLV will be well placed to capture the opportunities and strong long-term dynamics we see in the UK logistics property sector,” he said.
Arnaud Malbos, senior vice president, investments, Ivanhoé Cambridge, commented: “This new partnership with Peel Logistics Property in the UK confirms Ivanhoé Cambridge’s commitment to increasing its investments in logistics property globally.”