QuadReal and Valor Expand European Logistics Platform
Valor Real Estate Partners (“Valor”), Europe’s fastest growing last mile real estate specialist, has acquired, on behalf of its joint venture with QuadReal Property Group (“QuadReal”), a global real estate investment, operating and development company, two prime last mile logistics sites in Barking and Enfield, London, with a total GDV of £60 million. Both properties were acquired off market.
In Enfield, North London, the joint venture has acquired, Trafalgar Trading Estate, Enfield’s pre-eminent multi-let industrial park. The 79,435 square foot property benefits from strong specifications and totals 11 units across three terraced buildings. It is 92% occupied by a range of trade counter and last mile businesses, with an average lease term of two years. Located at the base of the M1 motorway and A10 trunk road, it provides access to approximately 6.4 million people within a 60-minute drive.
In Barking, East London, the joint venture has acquired a currently vacant 3.49-acre site, where it intends to develop a best-in-class build-to-suit last mile distribution hub. Occupiers will benefit from excellent connectivity via the nearby A13 and North Circular, as well as Barking’s position as one of London’s major industrial centres, where ongoing residential-led regeneration projects, including Barking Riverside, are set to continue eroding supply.
Jeremy Achkar, Senior Vice President at Valor, added: “The off-market purchase of the Trafalgar Trading Estate represents our first acquisition in Enfield. It is one of London’s key industrial submarkets, and we look forward to growing our presence there in the coming years.”
Timour Wielemans, Vice President at Valor, commented: “We are thrilled to have secured this prime 3.5-acre site, which extends our London development pipeline past 700,000 sq ft and where the intention is to deliver our first build-to-suit scheme. Leveraging our new in-house development team, we are well-positioned to take on increasingly complex projects and deliver bespoke products that align with the needs of our occupiers.”
Thomas Blangy, Senior Vice President at QuadReal Property Group, said: “These acquisitions align with our strategy of capitalising on high-growth urban logistics markets where supply constraints and strong demand present opportunities for long-term value creation. London’s last-mile logistics sector continues to offer solid fundamentals, and through our partnership with Valor, we are well-positioned to generate sustainable returns by delivering strategically located assets that meet occupier needs in these key submarkets.”
The joint venture was advised Altus and SBY on the Barking acquisition.
I think it's worth repeating what Thomas Blangy, Senior Vice President at QuadReal Property Group, said:
“These acquisitions align with our strategy of capitalising on high-growth urban logistics markets where supply constraints and strong demand present opportunities for long-term value creation. London’s last-mile logistics sector continues to offer solid fundamentals, and through our partnership with Valor, we are well-positioned to generate sustainable returns by delivering strategically located assets that meet occupier needs in these key submarkets.”
Indeed, London’s last-mile logistics sector continues to offer solid fundamentals and this partnership with Valor is allowing QuadReal to expand its logistics assets in key cities.
And this joint venture with Valor on logistics is ramping up quickly.
At the end of September, IPE Real Assets reported Valor and QuadReal European venture adds four French assets:
Valor Real Estate Partners and Quadreal Property have invested €50m to acquire four assets in France as part of their ongoing logistics investment partnership.
The joint venture has acquired and will refurbish a vacant 7,000sqm building in Goussainville, North Paris, and has also bought a vacant 10,000sqm warehouse in Lyon.
In separate deals in Paris, the partnership has acquired a 5,000sqm fully-let property located near Orly Airport, and a 6,000sqm vacant property in West Paris, where Valor will carry out a refurbishment programme.
Ben Brunschwig, principal at Valor, said: “Our disciplined focus on select high growth metropolitan areas in France, coupled with a data driven local market approach and deal sourcing capabilities, is enabling us to continue deploying capital at an attractive entry point.
“With new supply increasingly constrained by competition for land from alternative uses, and supportive technological and demographic mega trends, we have a high conviction that our value add strategy will continue to generate both rental and capital growth outperformance.
“We see the rest of this year and next as an exciting time to accelerate deployment, extending our market leading last-mile platform.”
Thomas Blangy, SVP at QuadReal Property, said: “Over the past four years, alongside Valor, we have built a robust logistics portfolio in Europe, a sector that remains one of QuadReal’s key areas of conviction in our global investment strategy.
“These four properties, located in the high-demand regions of Paris and Lyon, add to QuadReal’s global industrial portfolio and will benefit from the Valor team’s on-the-ground urban logistics expertise.”
In November 2020, European urban logistics investor Valor and QuadReal Property formed a joint venture to invest €1bn urban logistics assets located in key UK, French and German cities.
At the time, the companies said QuadReal, the real estate arm of British Columbia Investment Management Corporation, would be the majority investor in the partnership, which had initial capital commitments of €440m.
With leverage, the value-add and develop-to-hold investment platform was expected to have more than €1bn of investable capital.
In January 2022, the pair launched a second value-add and development venture with a plan to invest an additional €3bn.
Just shows you how important strategic partners are when investing around the world.
This joint venture between Valor and BCI has been extremely successful at ramping up their European logistics portfolio.
I'd invite my readers to read more about Valor Real Estate Partners' strategy here.
Think about how many things you order from Amazon, Walmart, the Bay or whatever and how important it is for companies to store those goods closely to you in a warehouse and deliver them to you in a timely manner.
That's why the last-mile logistics sector continues to offer solid fundamentals and Canada's pension funds all have invested in this sector in Europe and elsewhere via strong strategic partnerships (joint ventures where they put up most of the capital and pay no fees).
Alright, going to make it short tonight but before I let you go, BCI released its inaugural Stewardship Report this week:
Stands firm on ESG and climate engagement to achieve real-world outcomes
Victoria, B.C. – October 8, 2024 – British Columbia Investment Management Corporation (BCI) today published its 2023-2024 Stewardship Report, demonstrating continued leadership in driving positive environmental, social, and governance (ESG) performance and generating long-term sustainable value through global policy advocacy, proxy voting, and engagement.
“BCI’s inaugural stewardship report builds on more than two decades of responsible investing,” says Gordon J. Fyfe, BCI’s Chief Executive Officer and Chief Investment Officer. “Active ownership is critical to delivering the returns our clients depend on, both through the management of risks associated with responsible investing and by capturing sustainability-related opportunities.”
This inaugural report furthers BCI’s annual ESG and climate-related disclosures, which are moving towards alignment with the globally recognized IFRS Sustainability Disclosure Standards, and provides an in-depth look at how BCI leverages its influence as one of Canada’s largest asset managers to drive continuous improvement with our portfolio companies.
“The challenges we face require action from all parties. As a global investor, we play a role in creating a resilient and productive investment environment for generations,” says Jennifer Coulson, BCI’s Senior Managing Director & Global Head of ESG. “While there is significant work ahead, the progress we are seeing from companies and policymakers alike reinforces our belief that multifaceted engagement can drive real-world outcomes.”
Highlights:
- Engaging beyond equities: BCI directly engaged 134 public and private portfolio companies
- , achieving our objectives or observing positive momentum in 58 per cent of cases, and supported collaborative engagements targeting over 2,000 additional public companies. Within fixed income, a less targeted asset class, BCI’s engagement with sustainable and conventional bond issuers supported the structuring of instruments more aligned with ESG best practices.
- Pursuing value creation: BCI engaged with 31 portfolio companies and partnersin our private equity and infrastructure & renewables resources programs, leveraging governance rights like board representation to support alignment on ESG and implement sustainability initiatives that will lead to stronger performance over time, generating value that can be realized at exit.
- Voting on climate disclosure: BCI voted at 2,445 public company meetingsin 52 countries during the most recent proxy season. We voted against over 100 directors for insufficient climate disclosure and supported 67 per cent of climate-related shareholder proposals, including those calling for additional emissions data from companies in high-emitting sectors and the incorporation of climate risk assessments into audited financial statements at oil and gas companies.
- Driving systemic change: BCI contributed to 26 ESG-related policy consultations, roundtables, and joint statements globally to advance priorities like ESG disclosure and methane regulation. We actively participated in the development of the International Sustainability Standards Board’s global disclosure baseline, released last year, and continue to advocate for its widespread adoption, especially in Canada.
BCI’s annual ESG and climate-related disclosures are published in our 2023-2024 Corporate Annual Report.
Read the 2023-2024 Stewardship Reporton BCI.ca.
ABOUT BCI
British Columbia Investment Management Corporation (BCI) is amongst the largest institutional investors in Canada, with C$250.4 billion in gross assets under management as of March 31, 2024. Based in Victoria, British Columbia, with offices in Vancouver, New York, and London, U.K., BCI manages a portfolio of diversified public and private market investments on behalf of its 29 British Columbia public sector clients.With a global outlook, BCI integrates ESG factors into investment decisions and activities that convert savings into productive capital to meet clients’ risk and return requirements over time. Founded in 1999, BCI is a statutory corporation created by the Public Sector Pension Plans Act. For more information, visit BCI.ca or LinkedIn
Last month, Jennifer Coulson, BCI’s Senior Managing Director & Global Head of ESG, was interviewed by Net Zero Investor where she stated “private markets are well-suited to engagement”:
Of the top 100 carbon emitters, only 30 are listed on a stock exchange. Is engaging with private markets an important part of your efforts to reach net zero by 2050?
One of our climate ambitions is to ensure at least 80 per cent of BCI’s carbon-intensive investments across asset classes have set mature net-zero aligned commitments by 2030. With about half of our $250bn in gross AUM invested in private markets, engagement with our private portfolio companies and partners is critical to achieving this goal, as well as managing climate risk and finding new ways to create value for our clients through the energy transition.
To support our increasing focus on engagement in private markets, we have grown the ESG teams embedded in our private equity and infrastructure and renewable resources programs, and recently developed a data platform that automates and provides on-demand access to climate information to empower portfolio managers and our investment teams.
While ESG stewardship in private markets is still developing, these asset classes are well suited for engagement, particularly to capture long-term sustainability trends. Investors are uniquely positioned and incentivised to support ESG performance and initiatives where it will increase risk-adjusted returns for clients. Through engagement, our partners and portfolio companies can tap into our team of experts and build value over a longer time horizon that can be realised at exit, which we see as a competitive advantage.
Can you provide some examples of specific engagements?
Over the past year, we have engaged extensively with five portfolio companies in our private equity programme, representing $1.6bn in net asset value, to establish and quantify ESG-related initiatives. Through this work, we have identified numerous opportunities for value creation and are working to execute on ESG-related initiatives that we believe can unlock hundreds of millions in value for our portfolio.
One example is PS Logistics, a leading flatbed truck transportation and logistics provider in the US. Collaborating with management, we quantified the financial benefit attributable to their "driver-first" culture. Management’s focus on prioritising drivers has led to distinct financial benefits such as reduced insurance premium costs, avoidance of costs in recruiting and training new drivers, lower energy costs through route optimisation, and greater market share from clients who are focused on sustainability in their supply chain.
Then, in our infrastructure & renewable resources program, we provided active oversight and strategic direction as a board member and owner of Mosaic Forest Management (Mosaic), a timberland management company located in Canada, on the development of its Big Coast Forest Climate Initiative. The overall direction of the company involves selling certified carbon credits generated from conservation of old forest habitats. BCI participated on a carbon credits committee to oversee the evaluation and execution of the initiative.
She didn't talk about sustainable investing and engagement in real estate because that falls under QuadReal but I can assure you, they take ESG very seriously there too.
For example, Valor Real Estate Partners has a section on ESG on its website where you can read their 2023 and 2024 ESG Report. QuadReal obviously has a section on ESG on its website.
Below, Christian Jamison set Valor up in 2016, with investment partners Jeffrey Kelter and Robert Savage, with the idea of creating a pan European Real Estate investment and Asset Management partnership focused exclusively on the logistics sector.
Today they have over 3bn euros under management, spanning over 180 properties and 12 million square feet.
Prior to Valor, Christian, established Delin Capital Asset Management in 2012 where he served as the CEO. He has worked at Robert Fleming, Credit Suisse, GE Real Estate and JP Morgan having graduated from the University of Bristol with a B.Sc. in Economics & Politics.
Great interview, QuadReal picked the right strategic partner to expand its European logistics platform.
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