Azora and PGIM launch €150m last-mile platform in Spain

Azora, the Madrid-based European private equity real estate manager, together with PGIM Real Estate, have launched the PGIM Real Estate Última Milla, a new Spanish-focused last-mile logistics joint venture. 

PGIM Real Estate, on behalf of its European value-add strategy, and Azora, will jointly fund the JV, while Azora will source, underwrite and manage the portfolio. This JV will be the first pure-play investment vehicle focused on last-mile logistics assets in Spain which is one of the largest and most attractive European markets for this asset class.

The JV will be funded with €75 mln in initial equity commitments, providing a total investment capacity of over €150 mln, which it expects to deploy over the next 2-3 years.

The JV will seek high quality last-mile logistics opportunities with strong sustainability credentials which it intends to deliver primarily through value add asset management, high quality developments and, selectively, the acquisition of stabilised operating assets. The investments will be located in the first-ring of Spain’s major cities, with a specific focus on Madrid, Barcelona and Valencia.

The demand for high quality last mile logistics in the Spanish market has become even more apparent as Covid-19 has accelerated the already strong structural trends driving the sector.

Spain’s historically low e-commerce penetration rate, which, even pre-Covid-19, was expected to grow by 11% per annum, combined with a wider focus on on-shoring and efficient supply chains as a result of the pandemic, is expected to drive increased demand for fit-for-purpose logistics space in the coming years.

Cristina Garcia-Peri, head of strategy and business development at Azora, said: 'Being able to launch Spain’s first pure-play investment vehicle for last-mile logistics assets, alongside such a high-calibre investment partner as PGIM Real Estate, allows us to further extend our substantial and long standing real estate investment platform.

'At a time when demand is increasing exponentially, with Spanish e-commerce penetration beginning to catch up with many other European countries, this venture will allow us to harness our expertise in the Spanish market to deliver double digit returns on behalf of our clients.'

Nabil Mabed, head of France, Spain and Portugal at PGIM Real Estate, added: 'The Spanish last mile logistics market is hugely undersupplied, and, following the Covid-19 crisis, the importance of on-shoring and supply chain are becoming increasingly important. We look forward to working alongside Azora to leverage these trends to source and deliver attractive opportunities on behalf of our clients.'


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