Segro Plc, the U.K.’s largest publicly traded owner of industrial properties, used 974 million euros ($1.3 billion) of its warehouses in mainland Europe to form a venture with Canada’s Public Sector Pension Investment Board.
Segro will own 50 percent of the venture, which will attempt to increase the portfolio’s value to at least 2 billion euros through developments and acquisitions, the Slough, England-based company said in a statement today. PSP Investments will contribute 303 million euros of equity.
“The transaction is the first step in building what we expect to be a strong long-term relationship with PSP Investments as we seek to take advantage of the growth and consolidation opportunities in the continental European logistics market,” Segro Chief Executive Officer David Sleath said in the statement.
Segro is seeking to grow its logistics business in Europe as demand for warehouses increases. Europe needs 25 million square meters (296 million square feet) of new distribution and storage warehouses in the next five years, about 11 percent of existing modern space, to keep up with Internet sales growth, Jones Lang LaSalle Inc. said in March.