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HINES PAN-EUROPEAN CORE FUND ACQUIRES THREE LOGISTICS WAREHOUSES NEAR LONDON’S HEATHROW AIRPORT

11 Nov 2020

Ten-acre plot by the UK’s busiest airport currently occupied by Dnata on a nine-year lease .

Hines, the international real estate firm, has acquired a prime logistics park beside Heathrow Airport on behalf of the Hines Pan-European Core Fund (HECF). The asset was purchased from Aberdeen Standard Investments for £80.3 million.

Developed in 2013, the Dnata City site comprises three logistical warehouses that provide state of the art secure air cargo campus facilities. The 19,418 square-metre complex is located just south of the airport’s southern perimeter boundary and is occupied by Dnata, Heathrow’s dominant cargo operator.

Heathrow Airport is the busiest airport in Europe by passenger traffic and a critical part of the UK’s trade infrastructure. 95% of the global economy is within reach of a direct flight from Heathrow. Heathrow Airport has ambitious expansion plans to double its cargo capacity and become one of Europe’s biggest cargo airports, and a stated aim of increasing cargo tonnage to 4m tonnes per annum by 2040. Whilst the majority of the Heathrow logistics market is dedicated to serving the airport, it also forms part of West London’s wider distribution infrastructure including other sub-markets at Park Royal, Feltham, and Poyle.

Since 2019, HECF has sought to increase exposure to urban logistics assets in key European cities with strong long-term growth prospects. The Heathrow acquisition represents the fourth urban logistics investment by HECF, and the second in Greater London, over the last 18 months.

The HECF was recently recognized as one of the top property funds in Europe, achieving the MSCI European Property Investment Award for the best performing pan-European balanced fund.

Peter Epping, Senior Managing Director and HECF Fund Manager at Hines, said: “The Dnata City site offers excellent proximity to Heathrow. Given the heavily supply-constrained location, we see strong long-term prospects for this prime asset beside one of Europe’s busiest airports, which will be a critical part of the UK’s travel and logistics infrastructure beyond the pandemic. This latest acquisition continues our strategy of leveraging our European platform and aggregating an urban logistics portfolio for HECF in European cities with the strongest long-term growth prospects.”

Greg Cooper, Director of Industrials and Logistics at Hines UK, said: “The Heathrow logistics market boasts defensive characteristics of restricted supply, limited new development opportunities and an acute shortage of Grade A fit-for-purpose accommodation. Dnata City provides some of the most modern cargo facilities within the cargo zone and critically is 3-5minutes from the main airport cargo gate. The property is truly critical infrastructure and we look forward to working with Dnata going forward.”

Nick Smith, Fund Manager, AIPUT said: "In a near zero interest rate environment, coupled with a drive to own and build resilient global supply chain networks, the investment market for the best critical infrastructure and industrial property has never been stronger. This sale is in line with our strategy to adjust the AIPUT portfolio to facilitate new investment opportunities presented in the post-Covid, post-Brexit world, and leverage the economic recovery when it comes. We will redeploy the proceeds into strategic airport locations with the strongest potential to generate value, including those within our portfolio where we will secure higher returns for our investors."

Hines was advised by Acre LLP and Aberdeen Standard was advised by Savills, DTRE and Eversheds Sutherland.

ENDS

Hines

Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 225 cities in 25 countries. Hines has approximately $144.1 billion of assets under management, including $75.5 billion for which Hines serves as investment manager, including non-real estate assets, and $68.6 billion for which Hines provides third-party property-level services. The firm has 165 developments currently underway around the world. Historically, Hines has developed, redeveloped or acquired 1,426 properties, totalling over 472 million square feet. The firm’s current property and asset management portfolio includes 576 properties, representing over 246 million square feet.

With extensive experience in investments across the risk spectrum and all property types, and a pioneering commitment to sustainability, Hines is one of the largest and most-respected real estate organizations in the world. 

Since entering Europe in 1991, Hines has grown its European platform to include offices in 16 cities as well as a presence in 55 cities in 13 countries, with €22.7 billion of assets under management, including €19.8 billion for which Hines serves as an investment manager and €2.9 billion for which Hines provides third-party property-level services, in Austria, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Poland, Spain and the United Kingdom. 

Visit www.hines.com for more information.

About the Hines Pan-European Core Fund (HECF)

The Hines Pan-European Core Fund was set up in 2006 with the aim of providing investors with a resilient income profile derived from a diversified portfolio of high-quality assets located in inner-city locations across major European cities.

The Hines European Core has been awarded by MSCI as the strongest performing fund over the 3 years 2017-2019 among the European institutional balanced sector funds, with a total return of 8.45% p.a. during 2017-2019, 211 bps above the average return of the benchmark, making it one of the best performing core property funds in Europe.

As of Q2 2020 the HECF portfolio was 97.2% occupied with an aggregate value of c.€1.6bn. The portfolio of the Fund comprises 25 assets including forward commitments, invested in 15 city markets across eight different European countries.

About AIPUT 

  • Aberdeen Standard Investments’ Airport Industrial Property Unit Trust (AIPUT) is an award-winning expert long-term investor specialising in industrial property on and near major UK airports. AIPUT is the only specialist airport-focused industrial fund in the UK for institutional investors with a life until 2036. AIPUT aims to deliver a positive ESG (Environmental, Social and Governance) performance impact throughout its portfolio, with a strategic target to achieve carbon neutrality by 2025. The fund has successfully achieved GRESB Green Star status in each of the last five years.
  • The fund, which marked its 15 year anniversary in March 2020, manages a prime portfolio of properties providing high-quality and customised warehouse and logistics space: 
  • £700m assets under management (@ September 2020)
  • 19 assets, amounting to c2.5m sq ft
  • 1m sq ft of assets at Heathrow, making AIPUT one of the largest landlords around the airport, serving the evolving needs of the airport and the air-freight related industry
  • Assets at London’s three major international airports: Heathrow, Gatwick and Stansted
  • Target clients and investors – pension funds & expert institutional investors
  • More information can be found at AIPUT’s dedicated website: aiput.co.uk 

About Aberdeen Standard Investments  

  • Aberdeen Standard Investments is a global asset manager dedicated to creating long-term value for our clients. With over 1,000 investment professionals, we manage £486.5 billion* of assets worldwide. We have clients in c.80 countries supported by over 40 offices globally. This ensures we are close to our clients and the markets in which we invest.  (*as of 31 December 2019)
  • We are high-conviction, long-term investors who believe teamwork and collaboration are the key to delivering repeatable, superior investment performance.
  • Standard Life Aberdeen plc is headquartered in Scotland. It has around 1.2 million shareholders and is listed on the London Stock Exchange. 
  • You can access the Aberdeen Standard Investments media centre here: https://www.aberdeenstandard.com/news-and-media