Prologis and CBRE Global Investment Partners form £1bn JV targeting the Midlands

Logistics specialist Prologis has confirmed it is to work with one of the world’s largest real estate investment management firms on a new £1bn development venture in the UK.

Prologis and CBRE Global Investment Partners, a division of CBRE Global Investors, will pursue a develop-to-own strategy focusing on prime markets in the East and West Midlands.

The venture, called Prologis UK Logistics Venture (UKLV), will also target London and the South East.

UKLV will acquire land, develop buildings and operate and hold logistics real estate. The venture will be seeded with a 7.6 million square foot portfolio of stabilised properties, developments in progress and land, with an initial closing of approximately 3.9 million square feet.

UKLV will be structured as a joint venture with 15% owned by Prologis and 85% owned by clients of CBRE Global Investment Partners, with a total expected value of approximately £1bn.

“Our customers continue to grow in the UK and this venture helps meet new demand,” said Gary Anderson, CEO, Prologis Europe and Asia. “Current opportunities exceed the capacity of our existing funds and partnering with CBRE Global Investment Partners 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.”

Prologis currently owns and operates 23 million square feet in 97 buildings in the UK market. The formation of the JV is said to illustrate investor confidence in the continuing strength of the UK logistics property market.

Strong demand in the UK for logistics real estate is currently being driven by consumption, e-commerce and supply chain modernisation.

Prologis’ business strategy in Europe is to hold properties in a series of funds. UKLV is an extension of this strategy and will be the first venture dedicated to the UK market, as Prologis’ existing Pan-European funds already have significant allocations to UK properties.

CBRE Global Investment Partners was advised on the partnership by CBRE Capital Markets and Jones Day. Prologis’ in-house legal team was assisted by Linklaters.

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