CHALLENGE
Proudreed is a privately owned and privately financed real estate business in France with c.€2.2bn AUM. Proudreed have been developing their own distinct multi-let industrial product since 2006 and have established themselves as market leaders in the logistics sub-sector.
Owing to increased occupational demand, Proudreed sought to accelerate their development pipeline alongside an institutional investor as part of JV strategy. This was the first time that Proudreed had used external capital for their business.
The challenge was twofold: (1) Given the operationally intensive nature of the asset class, it was important that Proudreed maintained day-to-day operational control of their portfolio; and (2) Proudreed have an extra-long term model and as such SCA were challenged to find an investor prepared to take on development risk but also hold the assets for a period of 10+ years.
SOLUTION
Savills provided the following advisory services:
- Full review of the business, operational capabilities & track record;
- Optimised the portfolio construct including the identification of income producing seed assets and a national development pipeline to ensure the opportunity presented well to the market;
- Coordination of vendor due diligence pack and virtual data room.
- Preparation of high quality marketing materials including a detailed marketing video to ensure investor interest despite COVID-19 travel restrictions;
- Coordinated and accompanied investor presentations, asset inspections and management meetings whilst negotiating the commercial terms; and
- Assisted with commercial queries and led negotiations with interested parties. Provided input into transaction documents, alongside legal advisers.
RESULTS
- Initial screening exercise covering over 30 international investors from Europe, North America, Asia and the Middle East to ensure only qualified parties were progressed;
- Identified c.15 Tier One target investors to participate in a formal process where competitive tension was driven throughout;
- Advised our client as to the interest received and outlined which parties would invest with a long term mind-set and ensure Proudreed maintain the autonomy they have always enjoyed;
- Our ability to drive competition led to highly attractive pricing of the seed contribution and unprecedented commercial terms with a new market setting promote structure;
- SCA enabled Proudreed to accelerate their expansion plans in response to a booming occupational market and increased developer competition, ensuring their market leading position was maintained; and
- Our broad capabilities, expertise and experience has led to the introduction of other potential mandates on their UK portfolio.