EUROPE - Arlington Securities has launched a Continental European Logistics Fund that will allow the fund to hold a portfolio of prime industrial real estate exceeding €1.2bn.
The fund will aim to provide long-term, stable core property exposure with a total equity return target of greater than 9.5% pa. It has closed the equity raising at €625m and will look to grow in the next few years as more property is acquired. The long-term gearing target is 50%.
The fund attracted institutional investors from Europe, the Middle East and Australia reflecting the strong global appetite for European property. The European logistics industry has grown on the back of the expansion of transport routes to and from China and the Middle East. The continued trend towards outsourcing is expected to continue to drive the need for good quality distribution networks and therefore the demand for warehouses and other logistics property near good trade routes such as ports and airports.
Peter Davies, fund director, said: "Institutional investors from across the globe are looking to invest in an asset and location which they believe is ideally placed to benefit from the increasingly globalised economy. The long term nature of the asset also makes it ideal for institutional investors looking to diversify away from bonds while achieving higher returns."
Arlington is part of the Australian listed Macquarie Goodman Group (‘Macquarie Goodman’), which will invest around 40% of the fund initially, before scaling the figure down to a holding range of 20% to 30% over the long term.
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