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Three Canadian Investors Team Up For $1B U.S. Logistics Fund

Investors' appetite for U.S. warehouses and distribution centers shows no signs of cooling.

Three Canadian investment groups have teamed up to launch a joint venture to acquire $1B in logistics real estate in the U.S., IPE Real Assets reports. Alberta Investment Management Corp. and Canada Pension Plan Investment Board will each own 45% of the new venture, while Toronto-based WPT Industrial REIT will own the remaining 10%.

Georgia Pacific distribution center in University Park, Illinois

CPPIB Managing Director Hilary Spann told IPE its interest in the logistics market is largely driven by e-commerce's continued strength in the U.S. The joint venture will reportedly target the industrial equivalent of core markets: the national hubs surrounding Chicago, Atlanta and Dallas, as well as the international hubs in New Jersey and around Los Angeles.

Both main players in the joint venture have diversified holdings in real estate, with CPPIB owning a stake in multiple airports and AIMCo (not to be confused with Denver-based Apartment Management & Investment Co., or AIMCO) participating in a $1.3B U.S. multifamily vehicle in recent years.

Whether due to e-commerce or a need for quicker and more efficient delivery to stores, retailers are driving industrial rent and development higher, and vacancy lower in many markets, though there are some exceptions. The sector's strong fundamentals are prompting some analysts to claim that its post-recession growth cycle will outlast those of multifamily and office real estate.