PGIM Real Estate provides financing for large London last mile industrial portfolio
PGIM Real Estate has provided Valor Real Estate Partners with a floating-rate senior investment loan for a Greater London multi-let industrial portfolio.
NEW YORK, Feb. 25, 2019 – PGIM Real Estate completed approximately $12 billion in transactions worldwide in 2018 on behalf of institutional and high net worth investors, including investments in real estate equity and debt, and property dispositions. PGIM Real Estate is the real estate investment business of PGIM, the $1 trillion global investment management businesses of Prudential Financial, Inc. (NYSE: PRU).
“PGIM Real Estate’s 2018 transactions reflect our ability to successfully identify assets that offer attractive income streams and sources of growth to deliver target returns for our clients over the long term, as well as assets that offer capital protection and are in locations that will fare well through a downturn,” said Eric Adler, chairman of PGIM’s real estate businesses and chief executive officer of PGIM Real Estate. “We capitalized on sources of growth through market-level growth opportunities, active asset management strategies, favorable structure trends, and value sectors and locations around the world, while continuing to selectively sell stabilized, non-strategic properties.”
The $12 billion total was across 216 transactions, spanning the Americas, Europe and Asia Pacific regions. Highlights include approximately:
“While there is a sense of caution among global real estate market participants – reflecting concerns about elevated real estate pricing, a perceived lack of available stock and heightened political uncertainty – capital is still targeting the sector and transactions activity remains stable,” Adler said. “As investors seek to achieve an optimal mix of offense and defense in their portfolios, we are wellpositioned to employ our disciplined and globally integrated investment approach to capitalize on the resulting opportunities around the world. These include supply-constrained markets and non-traditional real estate sectors with structural growth potential, as well as debt investments that can offer reduce risk exposure.”
In the United States, PGIM Real Estate continued to focus primarily on high-barrier markets, as well as higher-yielding secondary assets and markets, to reach nearly $5 billion of acquisitions. More than half of its acquisitions activity targeted the multifamily sector – including more than $1 billion – in workforce housing properties, consistent with the company’s expectations that job growth and demographic trends will continue to fuel growth in apartment rentals. PGIM Real Estate was a net seller of office assets, with more than $1 billion in dispositions.
In addition, PGIM Real Estate provided more than $500 million in financing, including preferred equity, core plus and mezzanine debt.
In Latin America, transactions were mostly industrial acquisitions in the central area of Mexico, the Bajío region and the northern state of Chihuahua.
In Europe, the U.K., France and Germany accounted for the majority of transactions activity. Of the 38 European acquisitions, the office sector was a major focus as PGIM Real Estate continued to focus on value-add opportunities in major markets.
In addition, PGIM Real Estate provided more than $400 million in financing across 12 transactions, primarily in the U.K. Transactions included whole and junior loans, and mezzanine and preferred equity positions in development and existing assets. Sectors included traditional residential, student housing, office, retail, industrial, mixed-use schemes and hotels.
In Asia Pacific, transactions focused on major cities in Australia, Japan and Singapore. The office and retail sectors accounted for the majority of transactions as PGIM Real Estate continued to focus on enhanced-return opportunities in select key markets and sought to capitalize on limited supply in previously underperforming markets.
Representative activity around the world