M7 Real Estate has acquired a portfolio of four industrial and logistics assets across France for approximately €80 million, marking the first continental European investment for its joint venture backed by Oxford Properties and AustralianSuper.

The acquisition was completed on behalf of the European Supply Chain Income Partnership (ESCIP), a pan-European industrial and logistics investment vehicle supported by a joint venture between Oxford Properties and AustralianSuper. The portfolio was purchased from a 90/10 joint venture between PGIM Real Estate’s European Core Plus strategy and French real estate manager Alderan.

The transaction represents M7’s first deal since AustralianSuper acquired a 50% stake in Oxford Properties’ approximately €840 million industrial and logistics portfolio and its M7 platform. That partnership was announced in January and formally completed in April. ESCIP is targeting the build-up of a €4.5 billion portfolio over the next three to five years.

Comprising around 109,000 sq m of space, the portfolio is 83% leased and is located in established French distribution hubs including Lyon, Marseille, Nancy and Angers. Tenants include ID Logistics and Pomona EpiSaveurs. The assets offer potential for refurbishment, lease-up of vacant space, sustainability improvements and income growth.

The acquisition follows two earlier ESCIP investments in Greater Manchester earlier this year, with a combined value of around £60 million.

John Pow, Managing Director at M7 Real Estate, commented: “Following the completion of Oxford and AustralianSuper’s joint venture earlier this year, we are now focused on executing our growth strategy for the platform. This milestone transaction underscores our conviction in the sector and our view on the French market, as we look to scale the JV’s portfolio and continue deploying capital into high growth markets across the UK and western Europe.”

“Our immediate focus is on undertaking our property level asset management plans, leveraging M7’s expertise and on the ground presence to capitalise on the continued demand for logistics space in the French market.”

Alicia Peters Vice President, Industrial & Logistics at Oxford Properties, commented: “Having partnered with AustralianSuper at the beginning of the year to grow the ESCIP portfolio and the M7 Real Estate platform, this first acquisition in Europe is an important step in achieving that goal while giving us exposure to key French logistics markets outside of Paris which complement our existing portfolio. This transaction underscores both M7’s ability to source and execute the acquisition of high quality, well located assets across Europe and reflects our continued conviction in the industrial and logistics sector.”

Matthew Fidge, Investment Director at AustralianSuper said:  “We are very pleased to announce the first transaction since the completion of the joint venture between AustralianSuper and Oxford Properties.  This portfolio acquisition highlights our conviction in our European multi-let logistic strategy, as well the benefit of the M7 Platform’s established capability in the French market.  AustralianSuper looks forward to working with our partners to deliver attractive risk-adjusted returns for our members, and are ambitious to continue this momentum as we seek to further scale the ESCIP portfolio alongside the Oxford and M7 teams.”

Nabil Mabed, Head of France, Spain & Portugal at PGIM Real Estate added: “We acquired this portfolio in an off-market transaction during COVID in 2020 and have created significant value through asset management hand in hand with our operating partner Alderan. We are happy to complete a strong exit for our European core plus strategy in a market where overall transaction volumes are still low. This is a demonstration of the resilience of the French logistics market and of the quality of the portfolio which has a potential for further value creation under M7’s ownership.”