Aberdeen Standard Investments (ASI) said on Wednesday it will acquire 60% of Tritax Management LLP to strengthen the combined offering of both firms in the growing logistics real estate market.
Tritax is a specialist logistics real estate fund manager with assets under management of £5.1 billion throughout the UK and Europe.
“It has significant expertise within the logistics sector, from large warehouses occupied by major online retailers through to ‘last mile’, delivered by its experienced team,” said Aberdeen Standard.
“Among its mandates, Tritax manages two of Europe’s leading listed industrial logistics funds, Tritax Big Box REIT plc and Tritax EuroBox plc.
“The logistics sector represents the intersection of real estate with innovation and advanced technology, such as robotics and AI.
“The sector has emerged as a dynamic and increasingly critical driver of the UK and European economies.
“The long-term structural changes across the sector, such as the shift to online shopping, the importance of delivery capabilities, technological developments and subsequent supply chain dynamics continue to strengthen ongoing investment into this space.”
Aberdeen Standard Investments manages assets of around £456 billion and is the asset management business of Edinburgh-based Standard Life Aberdeen.
Aberdeen Standard is already one of Europe’s largest real estate investment managers, managing £37 billion of real estate assets across UK, Europe and Asia.
The investment signals a step change for Aberdeen Standard in this key growth area, fulfilling its strategy of providing deep sector specialism for its clients.
The move will further develop ASI Real Estate as a leading logistics real estate manager in the UK and Europe, ensuring it is “future fit” and focused on parts of the real estate market that are set to benefit from long-term structural change.
Tritax management will lead ASI Real Estate’s Global Logistics Team.
Reporting to ASI Global Head of Real Estate, Neil Slater, the Tritax team “will bring enhanced capabilities and skillsets, diversify revenue, and provide significant growth opportunities in this dynamic and expanding logistics sector.”
ASI said it will initially acquire a 60% of ownership interest in Tritax “with both parties aligned on the future direction and growth trajectory of the business.”
The structure of the transaction “ensures the long-term retention of existing Tritax clients, employees and partners along with the attraction of new ones.”
The transaction is expected to close in early 2021, subject to regulatory approvals and satisfaction of customary closing conditions.
Slater, Deputy Head of Private Markets, Aberdeen Standard Investments, said: “Logistics is, and will remain, one of the most attractive income and capital growth sectors within real estate over the long term.
“The ongoing impact of technological developments, the effect on supply chain management and, ultimately, the increasing customer demand for control over the delivery of goods and services makes this transaction a scalable and exciting opportunity.
“Importantly, it provides the potential to grow and further diversify future earnings through greater investment capability and expertise, scale and credibility in this sector.
“This transaction reiterates our commitment to evolve our real estate offering to ensure it develops with changing industry dynamics and client needs.
“I have a great deal of respect for Tritax and its achievements. We look forward to working with our new colleagues.”
Standard Life Aberdeen CEO Stephen Bird said: “Our growth strategy is built around our clients’ needs and there’s no doubt that our strong capability in private markets, particularly real estate, will be a differentiator for our business.
“The transaction with Tritax is a compelling strategic fit for our business – it significantly enhances our already strong real estate franchise, in an area of the market which benefits from accelerating trends.
“It’s a great outcome for us, Tritax and our respective clients.”
Tritax Management LLP Chief Operating Officer Henry Franklin said: “This is a significant milestone for Tritax, a leader in logistics real estate with over £5bn of assets under management.
“ASI’s expertise and global reach will complement our leading industrial logistics focus.
“We are excited about working with ASI to deliver more for our existing clients, occupiers and investors while retaining our unique culture and entrepreneurial edge.”