Real estate investment manager, ARA Europe, part of the ESR Group, has completed the acquisition of three urban logistics and distribution properties on behalf of its flagship discretionary value-add Active Fund series. The circa £25 million investment was made on behalf of ARA Europe Active Real Estate Fund V (“the Fund”).

The properties comprise circa 190,000 sq. ft. of lettable area in Aylesford, Birmingham, and Glasgow as part of the Fund’s strategy of assembling a high-quality portfolio of urban logistics assets in the UK. The portfolio will aim to provide investors with enhanced returns through superior rental growth due to compelling supply-demand dynamics in local sub-markets whilst future-proofing property values through an ongoing programme of capital expenditure to improve energy performance and ESG credentials.

The properties all benefit from proximity to key motorway junctions serving the UK’s largest cities and are fully occupied by international distribution and third-party logistics operators such as UPS and Scan Global Logistics, as well as national and regional occupiers. The acquisition continues ARA Europe’s long track record of successful aggregation strategies in the industrial and logistics sector in the UK and Europe.

Stuart Jackson, Head of Fund Management at ARA Europe, commented: “The market correction in H2 2022 has created an attractive window to aggregate last mile Urban Logistics assets in the UK’s top cities. The UK has highly constrained land supply in city fringe locations, and future development is becoming uneconomic with the cost of land, higher interest rates and increases in construction costs. These supply constraints along with robust occupier demand, driven by e-commerce, are why the last mile is a strategic priority for us. We have a healthy pipeline of off-market opportunities so expect to be adding further assets to the portfolio over the coming months.”

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