Recapitalisation of Block Industrial UK logistics portfolio

Copley Point Capital (“Copley Point”), a manager of European real estate and real assets, and Brookfield through its Real Estate Secondaries business today announced the closing of a newly established joint venture to recapitalize an approximately £180 million, 1.5 million square foot UK logistics portfolio of income generating assets.

The portfolio was previously owned by Copley Point and investment funds advised by Davidson Kempner Capital Management LP under the parties’ Block Industrial strategy and following the recapitalization Copley Point will retain an interest in the joint venture and the ongoing asset and development management of the portfolio.

The diversified portfolio comprises 10 high-quality logistics assets concentrated in the Midlands, Yorkshire and the South of England, prime UK logistics markets with strong transport links and significant supply/demand imbalances. The assets feature a compelling mix of income stability from long leases and near-term upside from active asset management opportunities. Brookfield has committed an additional £125 million equity investment to support the acceleration of strategic capex initiatives and provide go-forward capital for the acquisition of new properties to expand the portfolio alongside Copley Point.

Michael Heal, Managing Director of Copley Point said:

“The recapitalization by Brookfield is a significant endorsement of the business we have built in the past few years. We are excited to be partnering with one of the largest and most reputable institutional owners of real estate globally. We expect to grow the platform through defensible add-on acquisitions, with three deals due to exchange imminently.”

“In parallel we will continue to grow our platform with Davidson Kempner, which has shifted its focus to ground up spec developments of UK logistics. That platform has several deals already acquired, and a large pipeline it is executing.”

Alexis Prevot, Managing Director at Brookfield Real Estate Secondaries said:

We are excited to partner with Copley Point on this prime U.K. logistics portfolio which marks both our entry into the European real estate secondaries space and our re-entry into UK logistics.

“The continued proliferation of e-commerce and supply chain reconfiguration is driving accelerated demand for industrial properties. It is also creating opportunities for secondary capital solutions to enable GPs and LPs to participate in and benefit from longer-term value creation plans.”

The recapitalization marks the latest in a series of European logistics investments by Brookfield, which today has a portfolio totalling more than 25 million square feet across seven European countries.