Oxford and M7 Expand Logistics Platform in Spain, Launch UK-Wide EV Charging Network
Oxford Properties Group (“Oxford”), a global real estate investor, asset manager and business builder, announces its first investments in Spain, with the acquisition of seven Spanish urban logistics assets, via three separate transactions. The acquisitions were sourced and secured through Oxford’s portfolio company, M7 Real Estate (“M7”), the pan-European investor and asset manager specialising in multi-tenanted properties, and are in line with its strategy of increasing its exposure to urban logistics assets in key distribution locations with supply constrained dynamics.
The assets, which comprise a total of c. 90,000 sq m, were acquired throughout Q2 and Q3 with attractive financing terms. Located in prime logistics hubs within three key cities—Barcelona, Bilbao and Tarragona—the assets benefit from excellent connectivity to transport links and infrastructure, as well as uncapped annual CPI increases. The acquisitions include:
- A portfolio of five urban logistics properties totalling c. 60,000 sq m, four of which are fully occupied by established occupiers on long leases, with an opportunity to reposition the final vacant asset via a full refurbishment. The properties are strategically located in the highly sought after markets of Barcelona and Bilbao, approximately 20 km from the city centres.
- A fully let c. 26,000 sq m warehouse with significant asset management potential. The property, which is leased to Kellogg’s, is located in an established big box location in Tarragona, Catalonia, with direct access to all main arterial routes.
- A vacant c. 3,100 sq m urban logistics asset in Santa Perpetua, Barcelona, which has been acquired from a private investor and is situated only 16 km from Barcelona city centre.
M7 will undertake an active asset management strategy to upgrade the sustainability performance of the assets, targeting improved BREEAM and EPC ratings, as well as value-add capital expenditure initiatives to improve the space.
Oxford has invested over €1.8 billion gross through M7 since acquiring the platform in September 2021, helping to accelerate its ambitions to build a European logistics portfolio of scale.
David Ebberell, CEO of M7 Real Estate, commented: “Having now invested around €1.8 billion in the year since we were acquired by Oxford, these latest transactions provide a further strong endorsement of our working relationship and our ability to help Oxford deliver its global logistics ambitions. In this case, Oxford has entered the Spanish market for the first time and added seven very well located urban logistics assets in the supply contrained markets of Barcelona, Bilbao and Tarragona to its portfolio, all bar one of which benefit from uncapped annual CPI increases providing a hedge in the current inflationary environment.”
James Boadle, Senior Vice President, Europe at Oxford Properties, added: “Since acquiring M7 last year we have worked alongside their best in class management team to unlock opportunities and deploy significant capital into one of our highest global conviction asset classes. The insight and local expertise M7 provides has enabled us to make our first investments in Spain as we expand our European logistics platform, with a focus on assets that will continue to deliver strong returns to our members in this current macro-economic backdrop.”
CBRE, Savills and Cushman & Wakefield acted for the various parties.
Oxford Properties acquired M7 Real Estate a little over two years ago and it has been a great partnership, having invested over €1.8 billion gross through M7 since acquiring the platform.
The expansion of the logistics platform to Spain at this time makes a lot of sense as I note there has been increased activity in this market.
For example, last month, CBRE Investment Management acquired two new logistics properties in Madrid Spain:
Madrid – 23 September 2022 – CBRE Investment Management (“CBRE IM”), on behalf of a fund sponsored by the firm, has acquired two new logistics assets in Madrid, Spain, owned by DWS, with a total gross lettable area of 67,859 sq m.
The first asset, located in Meco, was completed in Q2 2020 and offers 51,969 sq m of gross lettable space with a LEED Silver rating. The second, in Torrejón, was completed Q4 2019 and provides 15,890 sq m of gross lettable space with a LEED Gold rating. Both properties are already leased under triple net leases to leading tenants including a German automotive component manufacturer, a national kitchen equipment distributor and an international sustainable energy company. They both also have EPC label A.
Both assets boast excellent locations with easy access to the A-2 and R-2 highways, and good connection with the M-50, Madrid’s outermost ring road. A driving distance of just 30 minutes to Madrid’s city centre means the assets are well positioned to accommodate, amongst others, tenants with a last-mile approach.
The assets have been delivered to high technical and environmental specifications, also benefit from the increased penetration of e-commerce in Spain and the lack of grade A logistics properties in the area.
Antonio Roncero, Head of Transactions for Iberia at CBRE Investment Management, said: “This acquisition was a rare opportunity to secure an income-producing grade A logistics portfolio through an off-market process. The Madrid logistics sector is attractive due to the potential growth of occupier demand versus an acute shortage of supply. Despite current economic headwinds, well located, high-quality and sustainable assets such as these are well placed to take advantage of ongoing rental growth in the logistics sector.”
Manuel Ibañez, Head of Real Estate Iberia at DWS, pointed out: “In 2017 at DWS we bet on the logistics sector and structured a forward purchase agreement with ICC, which culminated in the purchase of the two newly developed warehouses in 2019 and 2020. Following the leasing of both assets, we decided to divest, closing the circle of this deal, which will be profitable for our investors and is part of DWS's value add strategy. We will continue working to find investment opportunities in key locations and strategic sectors such as logistics, residential and offices, strengthening our presence in Spain”.
CBRE Investment Management logistics platform harnesses the firm’s investor and operator capabilities to deliver innovative, globally aligned sector solutions that capitalise on market opportunities. The platform has €13.8 billion* logistics assets under management in Europe, comprising 420* assets, 625* tenants and a rental area of 8.4* million square meters across 12 countries.
*All figures as of Q2 2022
I'm sharing this to show you demand for high quality logistics properties in Spain remains very hot despite the economic headwinds.
The key passage is that these assets benefit from the increased penetration of e-commerce in Spain and the lack of grade A logistics properties in the area.
It's not just Madrid, there is lack of high quality logistics properties in other cities in Spain, including in Barcelona and Bilbao where Oxford and M7 Real Estate just acquired assets.
The press release states M7 will undertake an active asset management strategy to upgrade the sustainability performance of the assets, targeting improved BREEAM and EPC ratings, as well as value-add capital expenditure initiatives to improve the space.
This is the benefit of having a strategic partner like M7 Real Estate, they can improve sustainability ratings and focus on value-add initiatives to improve the space, making it more attractive if they decide to sell these properties down the road.
Moreover, the press release states the assets benefit from excellent connectivity to transport links and infrastructure, as well as uncapped annual CPI increases.
In a high inflationary environment, infrastructure and real estate assets offer an embedded inflation protection component but these assets have uncapped annual CPI increases, which is very favorable if the inflation outlook worsens.
In related news, SSE, Oxford Properties and M7 just announced the launch of a UK electric vehicle charging network:
The energy infrastructure solutions arm of energy firm SSE has launched a UK-wide electric vehicle (EV) charging network in partnership with Oxford Properties.
SSE Energy Solutions said the new partnership marks the firm’s plans for a major EV charging network across the UK.
SSE said it plans to build 300 EV charging bays powered by traceable, renewable energy by 2027, with their first hub set to launch in September at Castlebank, Glasgow.
As part of SSE’s overall EV network strategy, the new deal aims to deliver new EV sites with up to 12 bays each at 20 of Oxford’s retail warehousing parks across the UK within 24 months. The parks are asset managed and operated by Oxford’s pan-European portfolio company M7 Real Estate.
SSE Energy Solutions is in talks with M7 to further expand the project, with a plan to open a potential 70 sites around the country in total by 2025.
Kevin Welstead, EV sector director at SSE Energy Solutions, said: “It is vital that we face the EV infrastructure challenge head-on if we are to meet our ambitious decarbonisation targets.
“We must ensure that drivers are able to access EV charging points easily and conveniently. Retail locations provide a perfect solution; people can simply plug in their vehicle while they shop and return to a fully charged car thanks to our ultra-rapid facilities.”
Josh Tyler, asset manager at M7 Real Estate, said: “With customers placing increasing importance on ensuring that the businesses and services they use share their sustainability goals, we understand it is critical that our retail parks are as green as possible.
“It is important to us and our occupiers that we are able to provide the customer with the best possible EV charging experience, working with SSE was an easy decision for us due to their commitment to renewables and proven track record on decarbonisation strategy.”
James Boadle, Senior Vice President, at Oxford Properties, said: “We believe our assets have an important role to play in supporting the green infrastructure required to help our customers and communities make more sustainable choices.
“This new initiative between Oxford, M7 and SSE benefits our retailers and shoppers alike with a fast, convenient way to recharge their EVs while shopping. We are firmly committed to playing our part to address climate change and meeting our Net Zero goals as we continue to decarbonize our global portfolio.”
I agree with James Boadle, Senior Vice President, at Oxford Properties, EV charging stations will play a more significant role in the future and this network will allow them to realize on their decarbonization strategy and support the green infrastructure required by their customers and communities.
In other exciting news, Japanese real estate giant Mitsui Fudosan Co. announced Wednesday the completion of "50 Hudson Yards," a 58-floor building in New York, which it hopes will be one of its flagship properties as it continues to advance into the international market.
Oxford put out a press release announcing that Fifty Hudson Yards officially opened its doors this week:
Today Fifty Hudson Yards officially opened with over 84% leased pre-opening. The nearly 3M square foot modern landmark designed by Foster + Partners has become a symbol of the city’s office resurgence. Related Companies, Mitsui Fudosan America and Oxford Properties Group hosted a celebration to welcome the leading financial and technology companies that will soon call Fifty Hudson Yards home, including BlackRock, Meta, Vista Equity Partners, Truist Financial, ServiceNow, Passkey and XTX Markets. They were joined by New York City Mayor Eric Adams. First move-ins will begin later this year.
Designed as multiple buildings within a building, Fifty Hudson Yards combines the rarified service of a boutique luxury office building with vast, column-free floorplates, high ceilings and sweeping skyline and river views, for an employee experience unlike any other.
“The opening of 50 Hudson Yards marks another major milestone in New York City’s continued economic recovery,” said New York City Mayor Eric Adams. “With some of the biggest investors in the world leasing space in this building, these business leaders are sending a clear message that they have confidence in the future of our city and want to expand their footprint in the greatest city in the world. Our administration will keep making investments in our homegrown workforce to ensure we continue to have the best talent, so we can attract and grow the companies and jobs of the future.”
“Fifty Hudson Yards’ growing tenant base of industry leaders reinforces that the office is back and better than ever,” said Jeff T. Blau, CEO of Related Companies. “Great ideas are born from collaboration and every detail of this building has been carefully chosen to enrich the benefits of face-to-face interaction. Whether employees are meeting in a bespoke workspace, one of the building’s many private lounges or restaurants, or taking in a neighboring world-class cultural institution, they are sure to find the inspiration that continues to cement New York City as a premier global center of innovation.”
“Fifty Hudson Yards stands out as one of the finest office buildings in the world, offering the next generation of office space in the vibrant and exciting Hudson Yards community,” said John Westerfield, CEO, Mitsui Fudosan America. “The column-free floors, state of the art building systems, floor-to-ceiling windows and spectacular views have already attracted many world-class companies as tenants. Together with our partnership with Related and Oxford on Fifty Five Hudson Yards, our substantial investment in Fifty Hudson Yards evidences Mitsui Fudosan’s long-term commitment to New York City and Hudson Yards. With the project nearing full tenancy, we look forward to welcoming our new tenants and their employees to this remarkable building in the coming months.”
“The purpose of the office has changed, and today the world’s best workplaces are an experience that inspire employees, aids learning and mentorship and act as an extension of a company’s brand. Fifty Hudson Yards achieves all of this and more,” commented Michael Turner, President of Oxford Properties. “The early success of Fifty Hudson Yards backs our conviction that best-in-class offices which deliver exceptional experiences, employee wellness, and high sustainability will continue to outperform. We continue to see this dynamic play out in markets across our global business. Today is another proud moment in the ongoing evolution of Hudson Yards as a premier destination for New York’s most innovative companies.”
“From the start, we envisioned our new global headquarters as a destination that enhances the personal connectivity that is at the heart of our ‘One BlackRock’ culture,” said Rob Goldstein, Chief Operating Officer of BlackRock. “This is the first time that all New York based employees will be under one roof, together, since the earliest days of BlackRock. Our new home in Hudson Yards provides a unique opportunity to bring together all of our capabilities, where we can better collaborate and most effectively serve our clients. We are incredibly proud to have our new home rooted in one of New York City’s most vibrant neighborhoods.”
The building will feature beloved New York City cultural and culinary institution Russ & Daughters. Additional dining destinations will be announced in the coming months, including plans to work with Chef Andrew Carmellini and NoHo Hospitality.
Designed by Foster + Partners, with interiors created in collaboration with Tony Ingrao, the LEED Gold-anticipated, 1,011-foot-tall, 2.9-million-gross-square-foot building exemplifies a classic understated New York exterior with a façade of hand-carved Italian granite interspersed between sweeping stretches of glass. Employees and guests are invited into a soaring two-level lobby linked by a distinctive spiral staircase that leads to a private bar and lounge on the mezzanine ideal for casual meetings, entertaining clients and taking in dramatic views of Hudson Yards’ Public Square and Gardens. A communal amenity on the 32nd Floor features a variety of gathering spaces befitting the most luxurious hotels including private dining rooms, meeting and event space and café with grab-and-go options. Tenants can reserve these spaces for private engagements. Each customizable workplace floor features expansive interiors, able to accommodate 500+ employees in limitless configurations, designed to nurture creativity. The building’s 94 high-speed elevators by TK Elevator, including the TWIN® system, ensure seamless movement around the building.
Norman Foster, Founder and Executive Chairman of Foster + Partners, said: “Our project is a response to the site within Hudson Yards, but its geometry also respects the wider context of the New York street grid. The innovative elevator strategy and unique space planning provide prime users of the tower with their own lobbies, exclusive access and separate identities. Column free floor plates and generous ceiling heights provide high quality workspaces with maximum flexibility for change in the future. A purpose-built tunnel connects the building directly to the subway while the lobby floors are connected by a delicate feature stair from which one can enjoy both views of Hudson Yards and the large-scale work of art by Frank Stella.”
At the top of the building sits Upstairs at Fifty Hudson Yards, an exclusive service offering that introduces a new paradigm for office benefits directed by the building’s dedicated concierge. Tenants have access to an exclusive suite of services and partnerships including Blade priority airport transfers, membership to the Classic Car Club Manhattan, enabling tenants to pick-up some of the most amazing automobiles ever built from the building’s rare private porte-cochère, executive valet parking, membership to Liberty National Golf Course, access to the neighborhood’s Mt. Sinai Health Center and childcare services from Vivvi.
Fifty Hudson Yards opened on schedule despite the unprecedented impact of the global pandemic. Prioritizing worker safety from the outset, it was also the second U.S. construction project to employ the Despe self-climbing cocoon, creating much needed perimeter exterior work space as the steel frame was erected.
“The opening of 50 Hudson Yards represents a milestone for commercial office construction in New York City and is one that would not have been possible without the hard work and dedication of the tradesmen and tradeswomen of the building and construction trades who worked on this project,” said Gary LaBarbera, president of Building and Construction Trades Council of Greater New York. “We welcome the opportunity to work with the Hudson Yards team to build exceptional places and spaces that fuel New York’s economic comeback.”
The ground level lobby features two large-scale abstract sculptures by modern master Frank Stella. Made of painted steel, aluminum and fiberglass, the original artworks add color and fluidity of motion to the lobby, evoking the excitement and restless innovation of the City itself.
Located on a full block between Hudson Boulevard and Tenth Avenue, between 33rd and 34th Streets, the building offers direct access to the No. 7 Subway and is located minutes from the Air Pegasus Heliport, Midtown Ferry Terminal, Lincoln Tunnel and Moynihan Station.
This iconic building offers the best of New York City. It will totally transform the area and work environment for those lucky enough to be working and living there.
I would invite you to read Oxford's case study on Hudson Yards here.
You can also read all the recent press releases from Oxford here as I can't cover everything in this post.
Oxford is firing on all cylinders and Michael Turner and his team are doing an outstanding job growing their business, adding value for their clients.
Below, from net-zero skyscrapers to green business parks, in this very recent WRLDCTY conversation with Oxford Properties Group President Michael Turner, he discusses the role institutions can play in the delivery of projects, and ideas that shape cities to the needs of their citizens.
Great discussion, worth listening carefully to Michael's insights as he sees a lot from his vantage point and discusses the future of hybrid work and Oxford's strategy in life sciences properties.
Oxford has scaled very nicely into life sciences properties and continues to do so as part of its plan to build a multi-billion-dollar portfolio in that sector.
Lastly, I lightly edited my last comment on the £1.5BN joint venture between PSP, NBIM and Longfellow to reflect that this is one of the largest single commitments yet to the UK life sciences real estate market. It's a huge JV that allows both funds to scale into that country's life sciences sector.
Comments
Post a Comment