EQT Exeter Closes $3B Industrial Fund

Image courtesy of EQT Exeter

Roughly 10 months after EQT Exeter’s launch of EQT Exeter Industrial Core-Plus Fund IV, the U.S. investment vehicle has completed its final close with a whopping $3 billion in equity commitments. The international real estate investment community’s appetite for the industrial sector remains robust; Fund IV closed well over its target of $2.5 billion, having reeled in contributors from North America, Europe, Asia and the Middle East.

EQT Exeter describes the participants in Fund IV as a “diversified group of valued investors.” In the U.S., a bevy of pension funds is among the list of contributors.

The Commonwealth of Pennsylvania’s Public School Employees’ Retirement System, which has invested more than a half-billion dollars in EQT Exeter funds, delivered $100 million to Fund IV. Ohio Police & Fire Pension Fund committed $50 million to the fund, making the investment its first of 2022 for its real estate portfolio. Fund IV also obtained $100 million from The Tennessee Consolidated Retirement System.

Tried-and-true game plan

EQT Exeter—formed in early 2021 through the merger of Conshohocken, Pa.-based Exeter Property Group with Stockholm’s EQT—already has a successful track record, which undoubtedly served as a magnet for investors to Fund IV.

“The investment strategy for Fund IV is a continuation of the successful strategy deployed by the previous three funds in EQT Exeter’s Industrial Core-Plus series: to assemble through on-the-ground, local sourcing a 130- to 150-property portfolio of modern industrial properties with high occupancy and long-term leases with creditworthy tenants in top-tier markets,” EQT Exeter notes in a public investment memorandum.

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Fund IV targets single-tenant big box distribution facilities, fulfillment centers, last-mile logistics centers and industrial service facilities. Modern big-box warehouses are of top interest and will comprise an anticipated 65 percent of the investments.

EQT Exeter aims to create a portfolio that offers global tenants the best assets to accommodate their supply chain needs. And with an eye on the aforementioned long-term leased properties with high occupancies, the fund manager also endeavors to provide investors with stable cash flow and an opportunity to capitalize on the growth in capital values arising from the enormous rental rate growth in the current industrial sector climate.

EQT Exeter has proven that it is adept at turning a profit for its fund investors. In late 2021, the global real estate solutions provider completed one of the largest industrial real estate transactions in U.S. history with the $6.8 billion sale of a 70.5 million-square-foot portfolio. EQT Exeter, which had increased the portfolio’s occupancy from 55 percent to 95 percent prior to the sale, continues to operate and manage the assets on behalf of the new owner.