QuadReal, one of North America’s wealthiest asset managers, is investing in a €1B urban logistics expansion in London, Manchester and key French and German cities.

QuadReal, which manages the real estate and mortgage programs of British Columbia Investment Management Corporation with a $171.3B portfolio, has formed a joint venture with Valor Real Estate.

QuadReal’s financial muscle will help overcome high entry prices in the London and Paris last-mile warehouse markets.

The venture will focus on urban logistics assets located in the greater metropolitan areas of London, Paris and Berlin, with a secondary focus on major UK and EU gateway cities, such as Manchester, Lyon and Frankfurt.

It will buy vacant or short-income assets with significant repositioning potential, as well as development sites.

“Urban logistics is one of our highest conviction strategies globally given the e-commerce growth that has accelerated rapidly as a result of COVID-19 and which is forcing businesses of all shapes and sizes to ensure their distribution networks are fit for purpose,” QuadReal European Managing Director Jay Kwan said.

“The strategically important European urban, infill market continues to offer significant opportunities for nimble and fully integrated managers to generate attractive risk-adjusted returns,” Valor Managing Partner Christian Jamison said.

“There remains a critical shortage of warehouse space in major metropolitan areas close to the necessary infrastructure to meet occupiers’ requirements, an imbalance that is growing as a result of both near-term drivers, such as COVID-19, as well as long-term drivers, such as urbanisation. It remains, however, a highly fragmented and granular segment of the industrial market.”