21st September 2023
PGIM Real Estate provides £80m financing for large London last mile industrial portfolio

PGIM Real Estate has provided Valor Real Estate Partners (“Valor”) with a floating-rate senior investment loan for a Greater London multi-let industrial portfolio. This is the fourth transaction between the two parties. PGIM Real Estate is the $209.7 billion real estate investment firm of PGIM.

The 11-property, 518,000 sq. ft portfolio is located near the M25, with six of the properties within the North and South circular ring roads. It is 99% occupied by 22 tenants including several major multinational corporations.

The transaction was led by James Day in the Originations team at PGIM Real Estate. The financing was provided on behalf of the firm’s senior debt strategy, PGIM Real Estate Senior Europe (PRES Europe Sarl.), which is predominantly focussed on floating rate lending. More broadly, the European senior debt platform has the ability to provide solutions across both fixed and floating rate loans.

Demand for UK last mile industrial remains robust in prime locations, with long-term structural tailwinds of e-commerce and emerging industries like green energy supporting leasing activity. Across major port and core distribution markets such as London, last mile industrial rental growth outlook remains strong.

James Mathias, portfolio manager for senior debt at PGIM Real Estate, commented:

“Against the backdrop of challenging market conditions, we have conviction in high-quality industrial and logistics properties in in-fill urban locations, such as this portfolio. We are excited to partner with Valor, and work with a trusted partner with whom we hold a long-standing relationship.”

Miles Muthu, Vice President at Valor added:

“This hard-to-replicate portfolio of “true” last mile assets is located within the North and South London circular ring roads with excellent connectivity across London. Valor’s comprehensive ESG refurbishments undertaken on the majority of the assets has resulted in buildings boasting specifications highly sought after by last-mile tenants and operators. We are pleased to have financed this portfolio with PGIM, a long-standing financing partner of Valor, who continue to support us in our expansion across major cities in the UK.”

PGIM Real Estate’s European debt platform provides alternative financing, including senior debt, whole loans and mezzanine with co-invest equity.

Valor has multiple sources of capital totalling more than €2bn of dry powder for industrial investment within major urban cities across Europe – this includes in particular London, Manchester, Birmingham, Paris, Lyon, Berlin, Munich, Frankfurt, Hamburg, Duesseldorf, Amsterdam, Rotterdam, Milan, Madrid and Barcelona.