Dubai: Arcapita Group, an alternative investment manager, has entered a joint venture with US real estate investment firm Arden Group to acquire multi-tenant industrial properties across the US. The new venture closed an initial portfolio of properties valued at over $550 million, with an additional $250 million closing shortly. The venture aims to grow its portfolio to $2 billion in gross asset value across the Top 25 US industrial markets.
The venture’s initial portfolio is around five million square feet spread across 18 industrial parks, located in Atlanta, Charlotte, Columbus, Dallas, Houston, Philadelphia, and Indianapolis. “This niche industrial sector has been a thematic investment strategy for Arden and continues to provide attractive cash yields,” said Craig Spencer, Chairman and CEO of Arden Group.
“The overall US industrial market is driven by powerful long-term tailwinds and sustained capital inflows, generating growing investor demand in the multi-tenant sub-sector,” said Brian Hebb, Managing Director and Head of Arcapita’s US Real Estate team. “The aggregation plans for this joint venture will allow us to build a sizeable market share within a highly fragmented sector.”
The joint venture is targeting ‘in-fill’ warehouses that have experienced very low new supply due to the limited availability of undeveloped land near urban centers. With growing demand for logistics capacity, rent growth for the multi-tenant subsector is expected to continue. The joint venture’s tech-enabled operating platform “aims to disrupt the decentralised, local ownership groups that characterize this asset class”.
“Infill industrial facilities are critical in the US supply chain and have become increasingly important given the acceleration of logistics and business services,” adds Shike Goedar, President and Chief Investment Officer of Arden Logistics Parks. “We intend to capitalise on strong US demand from a growing variety of tenants by providing institutional quality facilities in strategic locations.”