M&G Real Estate has expanded its UK multi-let industrial platform, named ‘Project King’, as part of its strategic plan to increase exposure to small-unit-industrial assets and those in the ‘last mile’ logistics property sector.
The asset manager has purchased nine multi-let industrial assets from Patrizia in a combined £165 million deal. M&G said it is a “rare opportunity” to add scale in just one transaction, which will provide a “diversified, growing income stream”.
Assets in M&G’s Project King – a partnership with asset management operator M7 – are let to more than 500 tenants across England, Scotland and Wales with assets under management exceeding £450 million as a result of recent transactions.
Peter Riley, head of capital solutions and UK commercial at M&G Real Estate, said the multi-let industrial sector has outperformed and is well-positioned to benefit from existing and future structural and macroeconomic trends.
The platform’s portfolio has shown resilience with more than 98% of rent collected during the Covid-19 pandemic.
Its performance has been driven by a series of environmental upgrades, pro-active leasing of vacant space, and selling assets with weaker green credentials.
Riley said: “The fundamentals of the occupier market remain very positive, which should lead to continued rental growth and the sustainable, long-term returns that our client seeks.”
Patrizia was one of the first institutions to catch onto the urban logistics growth story in 2014, working with specialist operator Caisson. Jamie Younger, its director of UK&IE transactions, said Patrizia leveraged its knowledge, expertise, and data-driven approach to drive value through strategic capex projects.
“This has enabled us to crystalise strong returns for our investors, though we still see opportunity in the sector,” he added.
M&G Real Estate’s total exposure to the industrial and logistics sector in the UK is £3.25 billion across 19.4 million sq ft.
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