The investment was carried out by M7 Real Estate, Pan-European investor and real estate asset manager, under the name Portuguese Industrial Fund, a new joint venture between international private equity and M7.
The total combined area is 85.600 sqm, spread across 5 logistic last-mile assets predominantly located in Lisbon and Porto; 3 office buildings located in Lisbon and 2 retail warehouses located in the Greater Lisbon area and Madeira.
For this operation, Novo Banco guaranteed a 20.5 million euro financing, «thus marking the beginning of a beautiful partnership with M7», it can be read in a release.
David Ebbrell, M7 Real Estate’s CEO, considered that « the formation of PIF with our partner and the establishment of a new banking relationship with Novo Banco mark significant strategic milestones for M7, as we continue to grow our business internationally».
And he added that «we have a long-standing track record in successfully co-investing alongside our joint venture partners to execute and deliver on strategies which play to our niche and in-depth market expertise. The initial portfolio we have assembled for PIF presents an attractive opportunity to add value through intensive asset management, which will be led by our local team on the ground in Lisbon».
Hugh Fraser, from M7, added that «to have the support of Novo Banco on these transactions is a fantastic endorsement of both the opportunity there is to create value for these assets and the track record we have built up in the Portuguese market over the last two years. I look forward to working with them as we continue to grow the portfolio and deliver on our asset management strategy».
PIF targets primarily logistics and office assets in Portugal with M7 acting as both investment and asset manager. The vehicle is M7’s second in Portugal where it manages a total of 132 million euro in assets, including on behalf of the M7 Portuguese Active Fund, which targets value add real estate opportunities in regional Portuguese markets and is fully invested.
In a release, M7 advanced that it «will implement an active asset management strategy to lease up the vacant space across the portfolio, which is 95% let, and grow rental income, taking advantage of low vacancy rates in the Lisbon office and industrial markets and the robust demand for industrial space in areas of strong connectivity from the rise of e-commerce».
Within this context, he highlighted «a robust increase in the demand for warehouse spaces, in locations close to urban centres, due to the rapid growth of e-commerce, with an expected significant pressure on I&L rents on the short-term».