Inogen Associate, Delta-Simons successfully completed Projects ‘Med' and ‘Mouse' for SEGRO European Logistics Partnership Sàrl. (SELP). Due diligence activities were undertaken on a total of 44 assets across France, Belgium, Germany, Poland, Czech Republic & Netherlands between September 2012 and March 2014. Inogen Associates' Antea Group and HPC provided the in-country expertise to gather data, provide the regulatory authority liaison service and deliver intrusive investigations and specialist site audits.
SELP was created in June 2013 by SEGRO Plc (SEGRO) and Public Sector Pension Investment Board ("PSP Investments") to provide a leading logistics property joint venture in Continental Europe. SEGRO is a leading owner, asset manager and developer of modern warehousing, light industrial and data center properties and PSP Investments are one of Canada's largest pension investment managers with $76.1 billion of net SELP intends to grow the portfolio to at least €2 billion through developments and acquisitions over the coming years.
Project "Med" was the name for due diligence activities associated with the creation of SELP and involved the assessment of 32 assets across France, Belgium, Germany, Poland, Czech Republic & Netherlands, which SEGRO contributed to the JV partnership. The objective of the works was to provide comfort and surety for PSP Investments on investment risks associated with the creation of the SELP portfolio.
Project "Mouse" was the first substantial acquisition of further assets by SELP and comprised 14 further modern logistics assets, located across Germany, Poland and France, which was acquired from two funds, one managed by Tristan Capital Partners (CCPIII) and the other co-managed by Tristan Capital Partners and AEW Europe (EPISO).
Outline & Scope of Works:
- Delta-Simons provided services initially to Segro and subsequently SELP to address environmental risks and liabilities associated with the assets included in the SELP Portfolio.
- The services provided included:
- Detailed site audits on all 44 assets following guidance contained in ASTM E 1527-13 (no sampling) and BS10175:2011.
- Intrusive investigations at selected estates in Germany and Poland to further assess identified risks and to provide development related data for budgeting purposes.
- ICPE auditing & thermal flow modelling for an asset in France.
General project management and financial risk reporting to identify capital and operational expenditure considerations.
Development of an ongoing portfolio management plan to set out required works over a two year period to address non-compliance and operational improvement works, leading to improvements in tenant management and information audit trails.
Outcome & Client Benefits:
Throughout the due diligence process the Client understood the investment risks posed by environmental issues and could revise their commercial position accordingly. With the appropriate level of technical due diligence, combined with practical commercial consultancy advice, environmental risks were managed throughout the process and were not allowed to become a significant consideration in the investment process, therefore allowing a suitable capital expenditure figure to be allocated to deal with statutory risks and liabilities.
A clearly defined Portfolio Management Plan prioritized post-acquisition tenant and site management activities. This allowed appropriate operational expenditure budgets to be developed and allocated to asset managers, with clear information audit trails to demonstrate compliance and mitigate the risk of future due diligence issues and asset devaluation.
"Inogen Associate, Delta-Simons is a key part of our delivery team and their advice is invaluable to our business decision making process. Their blend of technical knowhow and commercial sense, together with their attention to our needs has created a strong working relationship that goes back over many years. The value of the Inogen Alliance to our European operations is also huge. Delivery of services in multiple countries by respected in-country consultants, with the whole thing managed by and through Delta-Simons who interpret the issues in their tried and tested manner provides a strong business offering that is impossible to ignore."
David Proctor, Head of Investment - Continental Europe, SEGRO plc