SEGRO and Public Sector Pension Investment Board, one of Canada’s largest pension investment managers will form a leading logistics property joint venture in Continental Europe (SEGRO European Logistics Partnership or SELP).
This agreement constitutes an important milestone in SEGRO’s previously stated strategic objective to increase the use of third-party capital in order to accelerate growth of the Group’s Continental European logistics portfolio and leverage its capital and management platform across a wider asset base.
SEGRO will contribute substantially all its core Continental European logistics assets for €974 million, equal to valuations at December 31, 2012 together with capital expenditure and development gains since that date. The equity commitment by PSP Investments amounts to €303 million for a 50% share.
The Joint Venture intends to grow the portfolio to at least €2 billion through developments and acquisitions over the coming years. SEGRO will act as asset, property and development manager, earning associated fees and will be entitled to an incentive fee depending upon future performance.
David Sleath, Chief Executive of SEGRO commented: "This joint venture represents a significant strategic milestone for SEGRO and is a strong validation of the quality of our assets and management capability by one of the leading global institutional real estate investors. The transaction is the first step in building what we expect to be a strong long-term relationship with PSP Investments as we seek to take advantage of the growth and consolidation opportunities in the Continental European logistics market. It will further position SEGRO as one of the leading providers of logistics space in the region and strengthen our ability to meet the needs of our multi-national customers.”
Neil Cunningham, Senior Vice President, Real Estate Investments of PSP Investments, said: " Our participation in this joint venture advances our strategy of investing in high-quality logistics properties in Europe. We see this core investment as a unique opportunity for PSP Investments to build a scalable Continental European logistics portfolio and to forge a long-term working partnership with SEGRO, consistent with our objective of working with ‘best in class’ operators.”