Middle Eastern investors have backed a new £100 million fund betting on rising demand for storage space near London.
Investor JR Capital, which buys buildings on behalf of private families and institutions, said clients from Kuwait, Saudi Arabia, Bahrain and UAE have agreed to pump £25 million into a new property venture by JR Capital and developer and asset manager Chancerygate.
The firms will also co-invest into the fund and look to raise more, with plans for £100 million to be spent, much in greater London and the South East.
The strategy of the fund is to assemble a geographically diversified portfolio of assets across the UK, generate secure income from a diversified tenant base and add value through active asset management
JR Capital managing director John Collier-Wright said: “Clients see the defensive nature of this asset class as a hedge against the continued uncertainty around Brexit.”
He added: “The need for storage and last-mile logistics space will inevitably continue to drive demand and rents.”
Michael Ferris, head of investment at JR Capital, said: “With significant increases in online shopping, we expect this structural shift in the way we consume to continue to have an impact on demand for warehousing and distribution assets over the next cycle."
Chancerygate director Rory Finnan added: “The investment case for the multi-let industrial sector remains compelling with supply diminishing and demand remaining strong."
