Oaktree Capital Management’s ambitions to become a big player in the UK sheds market are taking a giant leap forward with a £280m deal to buy a logistics portfolio from Lone Star.
The US private equity firms are close to completing the off-market deal, dubbed Project Woodstock, which will see Oaktree take on more than 5m sq ft of sheds around the country.
The 16-strong portfolio, including five buildings totalling 1.3m sq ft at the Sherburn Distribution Park near Leeds, was acquired by Lone Star via its £1.3bn purchase last year of the distressed loans on Eurohypo’s £4bn UK book.
Eurohypo originally issued the loans to finance Rockpoint’s and Lehman Brothers’ £180m purchase of the Fusion portfolio from Gladman in 2007 and their subsequent purchase of a £140m portfolio from clients of Scottish Widows Investment Partnership in 2009.
Following the sale to Lone Star last year, Anglesea Capital was retained as asset manager on the portfolio.
Oaktree has piled in to a diverse range of real estate sectors over the past two years, including London residential, business parks, shopping centres and loan portfolios.
This week it teamed up with M7 to build a £100m-plus portfolio of multilet regional office parks. It already has a jv with M7 for small industrial estates in Europe.
In April it emerged the company had teamed up with Anglesea to set up a new platform targeting the big-box shed sector.
The partnership has already secured £72m of sheds in Oxford and Burton-on-Trent.
This latest acquisition will extend and strengthen the geography of its portfolio, adding assets in Liverpool, Leeds, Sheffield, and across the Midlands and South East.
The strategy emulates that of other US private equity giants, such as Blackstone, which has assembled an £800m UK sheds portfolio over the past three years.
Jonathan Holland, who manages Legal and General Property’s £1bn Industrial Property Investment Fund, said: “It is unsurprising that the UK is attracting new entrants seeking industrial investment opportunities.
“We have forecast industrial to be the top-performing commercial sector over the next five years, driven by both further yield compression and also by possibly the strongest rental growth seen for a decade.”
Jack.Sidders@estatesgazette.com
Nick.Whitten@estatesgazette.com
