A viable alternative

1st February 2016 | in Articles | by PERE

Niche logistics property managers can attract some of the capital currently frustrated queuing for the sector’s biggest brands, argue the senior executives at London-based Logistics Capital Partners.

While the largest logistics real estate investment managers have consistently attracted the largest institutional investors into their vehicles, there remains a plethora of investors left frustrated on the market sidelines.

For these investors, turning away from the asset class is not an option, given the widely accepted growth trajectory ahead for e-commerce. But if they are unable to invest via the funds of one of the sector’s large specialists, they must consider alternative routes.

James Markby, a foundingpartner at Logistics CapitalPartners (LCP), a niche logisticsreal estate investment managerhailing from London, reckonsthey, in fact, have three alternativeschoices. They either can investdirectly into the asset class orthey can commit their capital to ageneralist fund manager for which logistics real estate is but one strategic target.

The third option is to partner with a smaller specialist logistics real estate investment management firm such as LCP. As such, Markby says a real opportunity has opened up for the sector’s smaller firms to impress this frustratedcapital pool.

Nonetheless, given the sheer demand for institutional-grade logistics real estate at present, he admits the pressure is on to demonstrate the benefits of working with smaller specialists. In the current market, anecdotes abound of logistics land sales attracting as many as 25 bids and Markby describes such an environment as “a new era for logistics”.

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