GIC, Kennedy Wilson ink US$1b joint venture for urban logistics properties in UK

Singapore

SINGAPORE'S sovereign wealth fund GIC and New York-listed real estate investment firm Kennedy Wilson have entered into a joint venture (JV) to acquire and manage urban logistics properties in the UK.

The JV may also potentially expand into Ireland and Spain, said both parties in a joint statement on Friday.

The venture will be seeded with a US$220 million portfolio comprising 18 urban logistics assets in prime locations in the UK.

These are currently wholly owned by Kennedy Wilson.

In addition, the JV will seek more investment opportunities in last-mile urban distribution centres. It is targeting total assets of up to US$1 billion, said the two partners.

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GIC will own 80 per cent of the JV while Kennedy Wilson will have a 20 per cent stake.

Kennedy Wilson will be responsible for sourcing, acquiring and managing the assets.

Urban logistics properties have grown rapidly, boosted by strong demand from businesses looking to expand their distribution networks amid a limited supply of space across major cities, noted Mary Ricks, president of Kennedy Wilson.

"Over the last five years, we have significantly grown our footprint in this asset class," she added.

GIC chief investment officer of real estate, Lee Kok Sun, said the logistics sector continues to be a long-term area of focus for the sovereign wealth fund.

The sub-market of urban logistics will benefit from positive fundamentals, due to increasing occupier demand driven by accelerating e-commerce adoption and changing supply-chain management strategies, according to Mr Lee.

The JV's focused strategy is well-placed to capitalise on these trends and generate resilient returns in the long run, he added.

This partnership is part of GIC's broader strategy to invest in this sector.

In November, GIC announced it had signed a JV agreement with Melcombe Partners to acquire and develop urban-logistics properties in Europe.

These will comprise assets located in main gateway cities, with a focus on the UK, France, Germany, Spain and the Netherlands.

Europe's Melcombe will source, operate and manage the assets. GIC did not provide a deal value for that JV.