Prologis and CBRE GIP bet £1bn on UK logistics

The San Francisco-based industrial real estate developer and the subsidiary of real estate investment management firm CBRE Global Investors are to embark on a £1bn logistics investment program which both firms say demonstrates investor confidence in the UK logistics market. 

Prologis, the San Francisco-based industrial real estate developer, and CBRE Global Investment Partners (GIP), a division of real estate investment management firm CBRE Global Investors, have joined forces to invest more than £1 billion ($1.26 billion; €1 billion) in UK logistics assets.

The joint venture, called Prologis UK Logistics Venture (UKLV), will focus on prime UK markets such as London, the South-East and the East and West Midlands. CBRE GIP, on behalf of its roster of institutional investors, will be the majority partner in an 85/15 split.

UKLV, the partnership said, will be seeded with a 7.6 million square foot portfolio of established properties, developments in progress and undeveloped land.

A spokesman for Prologis said the partnership demonstrates investor confidence in the UK logistics market.

“Our customers continue to grow in the UK and this venture helps meet new demand,” said Gary Anderson, chief executive officer at Prologis Europe and Asia. “Current opportunities exceed the capacity of our existing funds and partnering with CBRE GIP is an efficient way to match available capital with the breadth of prospects in the UK.”

Jeremy Plummer, head of EMEA for CBRE Global Investors, said: “Prologis has a highly experienced team on the ground in the UK with a track record of successfully delivering development projects and managing stabilized assets. They are the ideal partner for this venture and will help meet our clients' demand for high quality logistics investments in the UK.”

The CBRE GIP partnership is the first publicized piece of business Prologis has conducted in Europe since January, when it merged a €571 million joint venture it manages with Allianz Real Estate with its Europe-focused open-ended core fund, Prologis Targeted Europe Logistics Fund (PTELF).

For the CBRE GIP deal, Prologis' in-house legal team was assisted by Linklaters, while CBRE GIP was advised by CBRE Capital Markets and Jones Day.