• Gateway Capital and Cadillac Fairview have launched a new investment vehicle, Gateway Capital Urban Logistics Partnership, which will focus on urban core plus, value add and development opportunities, and will focus on assembling a A$1 billion portfolio along and across the east coast of Australia
• Alongside the new investment vehicle, Cadillac Fairview has acquired a strategic stake in Gateway Capital Gateway Capital has deepened its focus on the Australian industrial and logistics sector through a new partnership with Cadillac Fairview (CF), the real estate arm of Ontario Teachers’ Pension Plan, with the formation of a new vehicle to acquire and develop Australian industrial and logistics assets.

The new investment vehicle, Gateway Capital Urban Logistics Partnership (GULP), will focus on urban core plus, value add and development assets on the east coast markets of Australia, targeting a A$1 billion portfolio. GULP will seek opportunities in areas that are forecast to benefit from strong tenant demand linked with the growth of e-commerce, together with other structural tailwinds supporting the industrial and logistics sector.

In addition to the formation and equity investment in GULP, Cadillac Fairview has also acquired a stake in the Gateway Capital operating platform. Through this investment, Cadillac Fairview will join Grosvenor as strategic investors in Gateway Capital, cementing strong support from institutional capital for the Company.

Stuart Dawes, Gateway Capital co-founder and CEO, commented: “We are delighted to be partnering with Cadillac Fairview on the GULP strategy, whilst also welcoming them to Gateway Capital as a shareholder. The global expertise and broad investment capability of Cadillac Fairview provides significant strategic value to Gateway Capital, supporting the Company as we execute our real estate strategies.

“We believe strongly in the urban industrial and logistics markets and are confident that our track record and deep experience in these markets will identify assets where we can add value to create attractive core assets and ultimately deliver strong investor returns. The GULP strategy is well set to take advantage of these opportunities.”

Karl Kreppner, Regional Head of APAC at Cadillac Fairview, said: “Our partnership with Gateway Capital marks our second direct investment in Australia, and we are excited to work alongside such a high-quality management team. The industrial and logistics sector continues to be highly attractive with strong fundamentals, and the changing macro-environment positions us well to take advantage of opportunities as they arise. We are looking forward to working with Gateway Capital to build up a portfolio of scale.”

Jun Ando, Managing Director, APAC at Cadillac Fairview, said: “Stuart, Peter, and the entire Gateway Capital team have an excellent reputation in the industry for hands-on, value-add investing throughout Australia. We are confident this will mark the first of many direct investments in the industrial and logistics asset class across Asia Pacific as we continue to expand our footprint in the region.”

Peter McDonald, Gateway Capital Co-founder and Chief Investment Officer, said: “Never have we witnessed such low vacancy rates in the Australia industrial and logistics sector. This is driven by the supply constrained market, which is further being impacted as new developments are delayed, whilst demand remains strong. This dynamic has led to unprecedented rental growth over the past 24 months, which is expected to continue in the short to medium term.

“The trend of e-commerce continues to represent a large proportion of the occupier demand, evidenced by these users accounting for 46% of all floor space leased in Australia in 2022. This is forecast to continue with e-commence penetration rates estimated to grow from 13% currently to 17% over the next four years.

“The strong thematic of the sector, coupled with our active and dynamic approach across both existing assets and new development opportunities, places Gateway Capital in a great position to take advantage of this market. Gateway Capital will continue the approach of driving value from assets that are underutilised and under managed.”