Global real estate firm EQT Exeter announced that it had closed its EQT Exeter Industrial Core-Plus Fund IV at an oversubscribed $3 billion in equity commitments, exceeding the $2.5 billion goal. A “diversified group” of investors hailed from North America, Europe, Asia, and the Middle East, a press release noted.
The planned focus is on “Class A, single-tenant big box distribution, fulfillment center, last mile logistics properties, and industrial service facilities (ISFs)” to “serve the supply chain real estate needs of established, global tenants.”
The fund will look for properties with high occupancy and long-term leases that can generate stable cash flow.
One question is how well the industrial segment can continue to operate. For example, one of the prime candidates with a large appetite for industrial space, Amazon, has been culling its industrial footprint, whether shuttering warehouses, subleasing space, cancelling new fulfillment center projects before they break ground, and delaying the opening of already constructed new warehouses for up to two years.
More generally, the US industrial market has shown signs of softening. Vacancy grew 20 basis points in the third quarter and net absorption dropped 132 million square feet from the second quarter.
That said, the firm claims 1,200 business-to-business tenant relationships and works on a global basis, so it may have some sturdy insulation against vagaries of the US market. “Over the last 15 years, the firm has closed 900 industrial investments, leading to industrial assets under management as of 30 June 2022, that total nearly $30 billion in gross asset value,” the company says.
“With our strong history of a hands-on approach to leasing, tenant relationships and asset management, we believe that EQT Exeter’s 24 local teams are better positioned than ever to identify and execute on attractive core-plus investments as we navigate the risks and opportunities of the current capital markets environment,” said portfolio manager Gardner Ellner.
EQT Exeter says that as of its June 30, 2022 balance sheet it had $77 billion euros (about $75 billion dollars) in AUM in 36 active funds. “EQT funds have portfolio companies in Europe, Asia-Pacific and the Americas with total sales of approximately EUR 29 billion and more than 280,000 employees,” it said. “EQT works with portfolio companies to achieve sustainable growth, operational excellence and market leadership.”