Oxford Properties Group has invested US$360 million in Lineage Logistics, a Novi, Michigan-based provider of temperature-controlled logistics solutions. Lineage is backed by Bay Grove Capital. Oxford, the real estate investment arm of OMERS, said the deal is its first in the cold storage logistics sector.
New York, NY – September 16, 2020 – Oxford Properties Group (‘Oxford’), a leading global investor, developer and manager of commercial real estate, has made a US$360 million investment into Lineage Logistics (‘Lineage’), the world’s largest and most innovative provider of temperature-controlled logistics solutions. The transaction will help fund Lineage’s growth initiatives, including new acquisitions and organic expansions to provide added value to customers, and marks Oxford’s first investment in the cold storage logistics sector as it continues to diversify its real estate holdings.
“Our investment into Lineage is part of our strategy to capitalize on the increasing demand for infrastructure that serves the digital economy,” commented Kevin Egan, Head of Investments, North America, at Oxford Properties. “The cold storage sector has highly favorable tailwinds via a combination of population growth, a growing consumer preference for fresh food and the continued adoption of e-commerce in the grocery sector, which has accelerated due to the current pandemic. As a result, the value of the cold storage market is forecast to grow 13% annually reaching $275 billion by 2024.
“The Lineage management team have transformed the company into the best-in-class operator and global market leader. Our investment demonstrates our confidence in its team, the Lineage platform and the sector as a whole,” added Egan.
Lineage owns and operates over 1.9 billion cubic feet and 56 million square feet of temperature-controlled capacity across more than 320 facilities in 13 countries, spanning North America, South America, Europe, Asia, Australia and New Zealand. Lineage owns and operates approximately 8% of the total global cold storage market, 70% more than its closest competitor.
The company, founded by Bay Grove Capital, was established in 2008 with a single cold storage facility in Seattle, Washington. With grocers and the food industry grappling with the supply chain requirements of feeding growing cities, by 2019 the company had established itself as the world’s largest temperature-controlled logistics company, through series of strategic acquisitions and organic growth.
As a result of its investment, Michael Turner, Oxford’s President will be appointed to the Lineage board of Directors.
“This significant investment is validation of Lineage’s business model, our innovative strategy and our plans to continue expanding our footprint as the world’s largest temperature-controlled warehousing and logistics company,” said Greg Lehmkuhl, President and CEO of Lineage. “As we reimagine the food supply chain and execute on our company purpose to eliminate waste and help feed the world, we remain focused on driving value for our more than 5,000 customers by operating globally and deploying industry-changing technologies to create efficiencies across our 320 facilities.”
Increasing its exposure to the global logistics market represents one of Oxford’s highest conviction investment strategies. Since the start of 2018, Oxford has built and invested in best-in-class logistics platforms across the globe to substantially increase its weighting to the sector. At the start of 2018, logistics represented only 4% of Oxford’s assets; today, Oxford is rapidly closing in on its ambition to have approximately a third of its deployed equity in the asset class. In July, Oxford made a follow-on investment in ESR, a leading APAC logistics real estate provider of $US493 million and became its largest institutional shareholder. Oxford was a cornerstone investor in ESR’s IPO to the Hong Kong Stock Exchange in November 2019.
“We invest thematically and with conviction but are creative with our capital around how we generate returns,” added Egan. “Beyond acquiring a property of portfolio, Oxford can develop, invest in debt or platforms to unlock high-quality opportunities. The cold storage industry is a sector that is poised for growth and demonstrates great resilience and defensive attributes in this current climate. Our investment will provide access to the sector’s market leader and supports its management team to execute its growth strategy.”
About Oxford Properties Group
Oxford Properties Group connects people to exceptional places, and is the owner, developer and manager of some of the world’s best real estate assets.
Established in 1960, Oxford manages approximately C$60 billion of assets across the globe on behalf of its co-owners and investment partners. Oxford’s portfolio encompasses office, retail, industrial, hotels and multifamily residential and spans more than 100 million square feet in global gateway cities and hubs across four continents. A disciplined and thematic investor, Oxford invests in properties, portfolios, development sites, debt, securities and platforms across the risk-reward spectrum. With its global headquarters in Toronto, Oxford operates out of 17 regional offices including London, Luxembourg, New York, Singapore and Sydney. Its long-term approach to real estate investment aligns Oxford’s interests to its customers and the communities in which it operates. Oxford is owned by OMERS, the defined benefit pension plan for Ontario’s municipal employees.
For more information on Oxford, visit www.oxfordproperties.com.
About Lineage Logistics
Lineage is the world’s largest and most innovative provider of temperature-controlled logistics solutions. Lineage’s expertise in end-to-end logistical solutions, its unrivaled real estate network, and its use of technology combine to promote food safety, increase distribution efficiency, advance sustainability, lessen environmental impact, and minimize supply chain waste. As a result, Lineage helps customers ranging from Fortune 500 companies to small family-owned businesses increase the efficiency and protect the integrity of their temperature-controlled supply chain. Lineage has grown its cubic feet by 60% annually since 2008 to 1.9 billion cubic feet, making it largest global provider of refrigerated space. In recognition of the company’s leading innovations, Lineage was recognized as the No 1. Data Science company on Fast Company’s Annual list of The World’s Most Innovative Companies in 2019, in addition to ranking 23rd overall in an evaluation of thousands of companies worldwide. (www.lineagelogistics.com)