Oxford Properties Group has agreed to acquire pan-European investment and asset manager M7 Real Estate. The investment is in line with Oxford’s global capital allocation strategy which has seen it both enter new geographic markets and increase its weighting to the logistics, multifamily and life sciences sectors. Across the globe, Oxford is building, buying and growing world-class businesses to meet its capital allocation priorities.
While M7 now invests across a variety of regional multi-tenanted asset classes, it was originally formed in 2009 as a specialist in light industrial and urban logistics, which remains its largest sector, and together with retail warehouses, accounts for half the €4 billion of assets currently under management. With a team of approximately 225 employees in 14 countries across Europe, M7 manages a portfolio of around 620 assets comprising 4.2 million sqm on behalf of a mix of separate account clients as well as commingled investment funds, in which it also co-invests.
The acquisition provides Oxford with a specialist asset and investment management platform which will be transformational in its ability to accelerate its deployment of capital into multi-let industrial and urban logistics across Europe. Oxford had previously stated its ambition to deploy £3 billion of capital into the European logistics sector, and the acquisition gives it immediate scale to do so.
Oxford will also benefit from M7’s management team’s expertise when considering additional corporate or portfolio acquisitions that might provide it with further access across these target sectors. The acquisition of M7 also presents opportunities for Oxford’s investment partners to deploy capital in the much sought-after European logistics sector and grow M7’s third-party capital under management.
M7 will continue to operate as a standalone business under the day-to-day management of the current leadership team, led by Richard Croft and David Ebbrell. This approach of backing world-class businesses with world-class management teams is consistent with Oxford’s investments in platforms such as Get Living, the UK’s leading build-to-rent operator, IDI Logistics, a leading US logistics platform and Investa, Australia’s premier office business.
Both Oxford and M7 have long recognised the important role that technology will play in the evolution of the real estate industry, not just in terms of its impact on how occupiers use property, but also the investment in and managing of the assets. M7’s holdings in asset management software firm, Coyote, and other PropTech ventures will help further Oxford’s strategy to access new real estate technologies.
Oxford and its portfolio companies manage approximately CAD$80 billion (€52 billion) of assets with almost a third of Oxford’s capital invested in logistics, warehousing and digital commerce strategies across North America, Europe and Asia-Pacific.
The acquisition is conditional on receipt of regulatory approval, with completion expected in H1 this year.
Jo McNamara, Executive Vice President, Europe at Oxford Properties, commented: “This transaction is a perfect example of how Oxford is creative with its capital to access opportunities in the asset classes and geographies where we have the highest conviction. We can purchase properties and portfolios; develop; invest in debt or equities; and acquire businesses, all in service of our capital allocation priorities. M7 is a market-leading platform, led by a highly ambitious and entrepreneurial management team that has deep-rooted expertise in the sector, through which we intend to significantly expand and accelerate our investment in this asset class across Europe. Across the globe, our investment partners are increasingly asking us to access the opportunities presented by the Oxford platform and portfolio of businesses. Our acquisition of M7 also allows our partners to invest capital with a best-in-class management team in a sector with great growth prospects.”
Richard Croft, Executive Chairman at M7 Real Estate added “From a standing start 11 years ago we have built M7 into a market-leading investment management business with over €4 billion of assets under management. This transaction provides us with the support and resources of a significant global real estate investor which shares both our entrepreneurial ethos and our strong ambition to grow the M7 business substantially over the next few years to create a truly world-class industrial-focused asset and investment management platform.”
James Boadle, Senior Vice President, Europe at Oxford Properties, added: “The industrial and logistics sector continues to be supported by significant tailwinds, with e-commerce penetration, evolving supply chains and the impact of technology on every aspect of society creating a supply-demand imbalance in all our markets. Through this one transaction, we gain access to a large-scale platform in M7, led by a world-class management team that spans 14 countries and instantly scales up our European business in this important sector. I look forward to working with the entire M7 team on what will be an exciting period of growth and opportunity for both of our businesses.”
