M7 Real Estate Review

M7 Real Estate is a subsidiary of M7 Investment Group of companies.

The company boasts of being a superior specialist in the pan-European, regional, multi-tenanted commercial real estate market.

M7 Real Estate operates in 12 European countries with an employee count of 215 people.

By the time of writing this article, the company handles over 600 properties worth approximately €6.9 billion.

These properties comprise retail, commercial, and industrial spaces.

It is mentioned on the company’s website that M7 offers an unparalleled investment and asset management platform.

As I said, M7 says that it provides access to the multi-tenanted regional commercial real estate market across Europe.

The company’s global operations are carried out in 14 countries and territories including Hong Kong and Dubai.

If you want to invest as an expat or high-net-worth individual, which is what i specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).

Primary Statistics

• Square Feet – 54.4 million
• Assets – 600 (approx.)
• Assets Under Management (AUM) – €6.9 billion (approx.)
• Units – 5,880 (approx.)
• Tenants – 3,225 (approx.)
• Contracted Rent – €439 million P.A. (approx.)

AUM by Country (As of 30 September 2023)

• U.K. – 61.5%
• The Netherlands – 11.7%
• Republic of Ireland – 6.5%
• France – 2.8%
• Denmark – 2.7%
• Croatia – 2.6%
• Portugal – 2.5%
• Poland – 2.1%
• Germany – 1.6%
• Spain – 1.4%
• Hungary – 0.7%
• Other – 3.9%

Sectors

• Industrial/Logistics – 55.3%
• Retail Warehouse – 20.5%
• Office – 15.6%
• Other – 5.3%
• Retail – 3.0%
• Mixed Use – 0.3%

Business Breakdown

• Separate Account – 58.1%
• Private Fund – 21.3%
• Joint Venture – 9.7%
• Listed Vehicle – 7.0%
• Other – 3.9%

Mandates

AIRE

M7 serves as the investment adviser for the Alternative Income REIT plc, which holds 19 commercial property assets in the UK.

Ardent

M7 functions as the investment and asset manager for the Ardent Companies, overseeing a portfolio of industrial assets throughout the UK.

Azure

M7 serves as the investment and asset manager for a US institutional investor, overseeing the acquisition of light industrial, land, and logistics assets in Germany, Poland, Hungary, and the UK.

Box + III

Box + III, a separate account focusing on retail warehouse assets across the UK, has M7 appointed as its investment and asset manager.

Box + IV

Box+ IV, a separate account holding retail warehouse property in France, has M7 appointed as its investment and asset manager.

BWP REIT

BWP REIT, listed on the Wholesale market of IPSX, owns Bridgewater Place in Leeds. M7 acts as the asset manager, with M7 Financial Services serving as the AIFM.

CoreBox

M7 serves as the asset manager for a separate account investing in logistics real estate across Europe, with initial assets acquired in the UK.

Eden

Eden, a joint venture between M7 and an institutional investor, focuses on investing in commercial retail property in the UK, with M7 acting as both the investment and asset manager.

KAMCO I, II, III, IV

M7 acts as the asset manager for a Middle Eastern institutional investor across several follow-on mandates, involving the acquisition of office assets in the UK.

M & G

M7 acts as the asset manager for M & G, overseeing a portfolio of multi-let light industrial assets across the UK.

M7 Box + II

M7 Box + II, a discretionary fund for high-net-worth investors, targets value-added regional retail warehouse assets in the UK, with M7 as the appointed investment and asset manager.

M7 CELF

M7 CELF, a discretionary fund for high-net-worth individuals, family offices, and institutional investors, focuses on mid-to-big box logistics assets across Poland, Hungary, the Czech Republic, and Croatia.

M7 CEREF II

M7 CEREF II, a discretionary fund for global high-net-worth individuals, family offices, and institutional investors, acquires value-added commercial real estate in pan-Central European markets.

M7 EREIP IV, V, VI

M7 EREIP IV, V, and VI are discretionary funds targeting high-yielding commercial real estate assets in various European regions, with M7 co-invested and serving as the appointed investment and asset manager.

M7 ISLAY, POLAF, PORAF

M7 ISLAY, POLAF, and PORAF are discretionary funds for global high-net-worth individuals, family offices, and institutional investors, each focused on specific regions and types of commercial real estate assets.

M7 Regional E-Warehouse REIT

M7 Regional E-Warehouse REIT, listed on IPSX, provides access to a portfolio of e-warehouse assets in the UK, with M7 as the asset manager and M7 Financial Services as the AIFM.

M7 REIH, REIP III, IX, V, VI

M7 REIH, REIP III, IX, V, and VI are discretionary funds targeting various aspects of the UK commercial real estate markets, with M7 co-invested and acting as the appointed investment and asset manager.

Mani Business Centre

M7 acts as the asset manager and property manager for Raiffeisen Pension Insurance Company for Mani Business Centre in Zagreb, Croatia.

Mendagest

MENDAGEST is a separate account mandate managed for a small group of investors.

Middle Eastern Sovereign Wealth SMA

M7 serves as the investment and asset manager for a separate account invested in M7 managed funds and direct real estate assets, with a commitment of €100 million.

Mileway

M7 acts as the asset manager for Blackstone, overseeing a portfolio of multi-let light industrial assets in Portugal.

MOVVI

Movvi is a separate account mandate managed for a family office.

Nekratine Alfa Primo

Nekratine Alfa Primo is a separate account for the Allianz Zagreb pension fund invested in office and warehouse assets in Croatia.

Onyx Ireland

Onyx Ireland is a JV between Blackstone and M7, invested in a portfolio of multi-let light industrial assets in Ireland, with M7 as both the investment and asset manager.

Portuguese Investment Fund

PIF is a JV between Siguler Guff and M7, investing primarily in logistics and office assets in Portugal, with M7 as both the investment and asset manager.

Primo Real Estate

M7 serves as the investment and asset manager for M7 Primo, a vehicle owned by Allianz Zagreb pension fund, focused on acquiring commercial property assets in Croatia.

Quattro Logistika

Quattro Logistika is a separate account for three Croatian institutional investors, investing in a logistics center in Zagreb.

The Mailbox

The Mailbox, a private vehicle owning an office-led, mixed-use asset in Birmingham, UK, is managed by M7 as the asset manager, with M7 Financial Services as the AIFM.

TREAM

M7 acts as the asset manager for a high-net-worth individual’s portfolio of long-let properties in the North West of England.

TREC II

TREC II is an M7 discretionary real estate debt fund for global high-net-worth and family office investors, providing senior debt loans for UK commercial real estate assets.

UrBox

M7 is the asset manager for a separate account invested in last-mile industrial assets across France, Denmark, Germany, and Spain, with plans to expand into other European markets.

Awards

Given below are the awards received by M7:

PROPS Awards (2022)

Deal of the Year – Listing of the Mailbox REIT on IPSX

Property Week Awards (2022)

Personality of The Year – Richard Croft

Property Week Awards (2022)

Irvine Seller Award

Celebrating outstanding work

EG Awards (2021)

UK and Global Company of the Year

PROPS Awards (2021)

Best Deal and Property Fund Winner

These are just among the several awards that the company received since 2016.

Business Lines

M7 Real Estate, as a prominent pan-European investor and asset manager, engages in various investment activities, including:

• Private Funds/Listed Vehicles
• Joint Ventures
• Separate Accounts
• Advisory

Private Funds/Listed Vehicles

In the UK, M7 manages 84 assets with a total contracted rent of £61.9 million and £789 million in assets under management, diversifying across retail, office, industrial, and other sectors.

In Europe (excluding the UK), M7 handles 169 assets, managing €1.3 billion in assets under various sectors, predominantly office and industrial, with a focus on the Netherlands.

Joint Ventures

M7 actively participates in joint ventures with private equity firms like Blackstone and Siguler Guff, managing assets in the UK and Europe.

The firm has a robust portfolio split across industrial, retail warehouse, and office sectors.

Separate Accounts

As a third-party asset manager, M7 oversees portfolios for institutional, family office, and high-net-worth investors.

Collaborating with industry leaders, including M&G and Allianz in the UK, M7 manages diverse portfolios totaling £2.8 billion in the UK and €782 million in Europe (excluding the UK).

The assets cover industrial, retail warehouse, office, and other sectors across various countries.

Advisory

Additionally, M7 provides advisory services, leveraging its experienced team to advise on existing assets and targeted acquisitions.

The firm has been involved in due diligence for European non-performing loan transactions.

M7 also advised major investors on industrial acquisitions and collaborated with:

• Croatian banks
• Insurance companies
• Pension funds

The collaborations were made regarding portfolio strategies and real estate investments.

Overall, M7 Real Estate emphasizes a diverse and strategic approach to real estate investment to maximize returns and provide comprehensive solutions to its investors.

M7’s Investment Rationale

In the realm of regional multi-tenanted commercial real estate, one observes compelling risk-adjusted returns.

These returns are said to outperform those produced by numerous other asset classes.

Their guiding philosophy involves:

• Concentrating on assets obtainable below replacement cost, inclusive of land.
• Emphasizing regional markets with a discernible supply/demand imbalance.
• Aggregating assets to enhance diversification and reduce risk levels.
• Prioritizing assets yielding at least a 500 basis points arbitrage between stabilized yield and senior debt cost.

A focus on the regional multi-tenanted real estate landscape and its associated advantages is observed from a third-person perspective:

• Emphasis on regional towns over capital cities, offering higher yields and more stable rental levels.
• Inclusion of multi-tenanted properties for diversified unit sizes, tenant types, and credit risk.
• Recognition of the limited supply due to alternative use and a restricted development pipeline.
• Acquisition of numerous assets at or below replacement cost.
• Diverse tenant base ranging from global companies to SMEs, contributing to resilient demand.
• Mitigation of concentration and credit risk through limited exposure.
• Recognition of the growing demand for industrial and retail warehouses driven by online retail.
• Anticipation of an expanding tenant base and subsequent rental growth due to reduced supply and increasing demand.
• Noteworthy rental growth potential in the current market scenario.

In terms of opportunities, the current market landscape unveils several enticing prospects across Europe.

There is a noticeable appetite among equity investors for core-plus and value-added regional commercial real estate.

A pipeline of deals has been identified, offering gross stabilized yields at the asset level of approximately 7% per annum.

This is particularly alluring in the prevailing low-interest-rate environment.

M7 Prides Itself in the Following Way

The organization takes pride in comprehending the needs of its clients and establishing enduring relationships with them.

The senior management team, with an average tenure of 10-20 years working together, aligns the business with investors by co-investing in the funds.

The approach combines entrepreneurial acumen with meticulous systems and extensive knowledge of local markets.

The pan-European real estate platform consistently delivers robust returns in the real estate sector to investors.

Notable points include:

• Expertise in the regional multi-tenanted sector with few direct competitors.
• Management of Elbestraße 12-16, 45768 Marl, Germany, under M7 EREIP IV.
• A seasoned and trusted management team demonstrating strong alignment with investors through co-investment.
• Recognition through industry awards, including the prestigious Property Awards’ “Fund Manager of the Year.”
• A proven track record of income-driven returns outperforming many other current investment opportunities.
• Consistent top quartile performance attracting both repeat investors and new capital partners.
• Follow-on investments from 95% of M7’s investors into additional M7 investment products.
• Employment of market-leading systems for operational efficiency and data accuracy, with highly scalable infrastructure and processes.
• Unparalleled European asset management platform overseeing transactions worth approximately €17.5 billion (circa €6.9 billion currently under management).
• Implementation of a proactive and intensive asset management program.
• High-level transparency and effective reporting for investors and lenders.
• Recognition as a trusted partner with strong relationships in real estate and finance, including prominent names that have been longstanding partners since the inception of the organization.

M7 Real Estate’s Corporate Social Responsibility

In the realm of Corporate Social Responsibility (CSR), M7 places a strong emphasis on equality, responsibility, humanity, and charitable contributions.

Equality

M7 ensures equal opportunities for all employees to advance within the company, fostering well-being, and promoting diversity across all entities.

Responsibility

To minimize the carbon footprint, M7 utilizes video conferencing to reduce business travel.

The company is dedicated to responsible actions within the societies it operates.

Humanity

Founded on the belief in a more personal approach to investment and asset management, M7 focuses on building enduring relationships.

While delivering returns and asset management solutions, M7 takes pride in its connections with partners, including investors, occupiers, service providers, and lenders.

Charity

M7 is committed to giving back to communities, pledging a percentage of annual profits to chosen charities.

The Charity Committee assesses requests based on criteria such as relevance to M7’s mission, transparency, credibility, and tangible results.

Actively encouraging staff participation, M7 fosters ongoing strategic partnerships with supported charities.

Notable partnerships include:

• LandAid: M7 supports LandAid’s efforts to end youth homelessness.
• WCCS Bursary Program: M7 champions a program providing student bursaries in collaboration with the Worshipful Company of Chartered Surveyors.
• OneDay.Global: M7 encourages participation in the movement, contributing one day’s pay and/or action to support urgent climate change programs.
• Myeloma UK: M7 extends support to this charity addressing incurable blood cancer and its associated conditions.
• Horatio’s Garden: M7 proudly supports the creation of beautiful gardens in NHS spinal injury centers across the UK, providing solace and support.

During the COVID-19 pandemic, M7 raised funds through a companywide step challenge, benefiting various international and local charities.

It addressed issues such as homelessness, mental health, child safety, illness, international aid, and wildlife endangerment.

As the investment and asset manager of The Mailbox in Birmingham, M7 is committed to environmental and social value initiatives.

These include partnerships with Birmingham Women’s & Children’s Hospital, supporting Artis Foundation, Food To Go, The Bike Project, and developing an apprenticeship program in 2022.

M7 Real Estate’s Environment and Sustainability Policy

M7 is dedicated to implementing sustainable practices, and guiding its clients and partners in the following areas:

Paper Reduction

Encouraging the minimal use of paper, including double-siding all paper to reduce consumption.

Waste Management

Identifying opportunities to decrease waste and advocating waste management on their premises and estates.

Facilitating the reuse or recycling of office waste, including paper, computer supplies, and obsolete equipment.

Energy Efficiency

Lowering energy consumption by investing in energy-efficient equipment and practicing good housekeeping.

Alternative Transportation

Promoting sustainable commuting options such as walking, cycling, or public transport for meetings and site visits.

Utilizing teleconferencing, video conferencing, or webcams when physical travel is impractical or costly.

Office Location

Encouraging the use of public transport by selecting offices in accessible locations.

Regarding the assets under management of M7 Real Estate

Environmental Due Diligence:

Conducting Phase 1 environmental reviews during the purchase due diligence phase, with additional Phase 2 as needed.

Establishing environmental management plans for all managed assets to minimize environmental impact.

Environmental Audits:

Regularly auditing the environmental performance of each asset and collaborating with tenants to enhance their environmental operations.

Pollution Reduction Initiatives:

Implementing waste management initiatives, including communal estate recycling facilities.

Reducing polluting releases from estates and promoting the efficient use of building materials in refurbishments.

Conducting regular environmental audits to identify and manage potential pollution sources in line with environmental legislation.

M7 is fully committed to supporting the UK’s Climate Change Act 2008 goals, actively working to reduce energy consumption both as a company and as an asset manager.

Sale of Warehouse and Office Property in Germany

M7 Real Estate has successfully sold a commercial building in Westerstede, northern Germany, covering 42,000 sq m of warehouse, office space, and development land.

The buyer is Ammerland Molkerei, a dairy farm cooperative.

This transaction carried out on behalf of Azure, a separate account mandate, marks the near completion of the exit plan for Azure.

M7 acquired the property in 2020 and identified it as a prime opportunity for an owner-occupier.

They implemented a strategic asset management plan to ready the building for sale, securing vacant possession.

Situated in northern Germany, the property boasts excellent connectivity with direct access to Autobahn 28, facilitating connections to the broader German motorway network.

Richard Fletcher, Director of Transactions in Germany at M7 Real Estate, remarked:

“This sale showcases our ability to implement innovative asset management strategies for specialized assets.

After acquiring the property, we executed our plan, preparing it for sale to an owner-occupier.

Leveraging the current market liquidity for smaller lot sizes, we captured value for our investors.

The property offers significant potential for the dairy cooperative to expand its business, given its specialization in the local area.

Germany, along with the UK and Nordics, remains a crucial market for M7. We aim to grow by investing in value-add, core+, and core opportunities, particularly in the industrial and logistics sector.”

M7 received advisory support from Jolas Consulting and Luther Rechtsanwälte during the transaction.

Completion of Sales Worth €109.1M Across the Netherlands

M7 Real Estate has reported the sale of 30 properties in the Netherlands through 26 individual transactions, amounting to €109.1 million this year.

The diverse portfolio, covering 117,300 sq m, includes 16 offices, 11 retail warehouses, two retail assets, and one industrial warehouse.

Acquired between 2015 and 2019, M7 implemented various asset management initiatives, including leasing vacant spaces and renegotiating leases.

Notably, the repositioning and reletting of a retail warehouse portfolio in 2022 involved repurposing units for industrial and last-mile logistics.

This resulted in the enhancement of occupier appeal and asset value.

The sales were conducted on behalf of M7’s pan-European value-add funds, such as M7 EREIP IV, M7 EREIP V, and M7 ISLAY.

These discretionary funds were initially invested in the industrial, retail, and office sectors across Germany, the Netherlands, Denmark, Finland, and Ireland.

The Netherlands stands as M7’s second-largest market outside the UK.

Following these sales, M7 oversees a total of €760 million in assets, spanning 132 industrial and logistics, retail warehouse, and office buildings.

David Ebbrell, Chief Executive of M7 Real Estate, noted:

“These sales align with our business plans where asset management objectives have been achieved, and the sale prices offer good returns for our investors.

While investment volumes for large lot sizes remain low in the Dutch market at present, we have seen strong demand for smaller assets, such as these, across all sectors and particularly from local investors with equity to deploy.

We are also seeing positive occupier demand, evidenced by the leasing activity which we have completed.”

M7 received advisory support from Loyens & Loeff, Van Doorne, CBRE, Prime Realty Partners, 1530, and 3Stone during these transactions.

My Take on M7 Real Estate

On the Bright Side

M7 Real Estate offers several potential advantages for investors:

• M7 manages a diverse portfolio across various sectors, including industrial, retail, and office properties, as well as different geographic locations.
  This diversification can help spread risk and potentially enhance overall portfolio stability.

• M7 has a track record of successful real estate investments and asset management strategies.
  Positive historical performance may instill confidence in investors regarding the firm’s ability to generate returns.

• M7 is committed to sustainability and environmental responsibility.
  This commitment may appeal to socially conscious investors and align with the growing emphasis on environmental, social, and governance (ESG) considerations in investment decisions.

• M7 employs innovative asset management strategies, such as repositioning and reletting properties, to enhance asset value.
  This proactive approach may lead to improved returns on investments.

• M7 operates across multiple countries and territories, providing investors with exposure to different markets.
  This global presence allows for potential opportunities in diverse economic and real estate conditions.

• The firm emphasizes building long-term relationships with clients and partners.
  A stable and experienced management team working together for extended periods can contribute to effective decision-making and continuity.

• M7 is committed to best practices in sustainability, waste reduction, and energy efficiency.
  Investors seeking alignment with responsible investment practices may find these commitments appealing.

• M7 places importance on financial transparency and effective reporting for investors and lenders.
  This transparency can provide investors with the information needed to make informed decisions about their investments.

• M7 focuses on value-added opportunities, including core-plus and core investments.
  This strategic approach may target assets with the potential for increased value over time, enhancing potential returns.

On the Downside

• Always remember that real estate investments, like most other investment vehicles, are subject to fluctuations.
  Individuals who invest in real estate should be able to cope with downturns and unanticipated changes in market conditions.

• In most cases, participating in the real estate market often requires a substantial amount of capital.
  Therefore, regular investors may not be able to invest in real assets, especially those offered by M7 Real Estate.

• As the investments belong to a specific sector, specific geography, and specific asset class, the concentration risk is unavoidable.

• Real assets often tend to be less liquid compared to other types of assets, and it can be complex to exit those investments.

• The success of real estate investments often depends on effective property management and leasing.
  Any operational challenges, such as difficulties in tenant management or property maintenance, could impact returns.

• Changes in interest rates can affect financing costs and property valuations, potentially impacting the returns on real estate investments.

• Regulatory changes in the real estate industry or changes in tax laws could have implications for the financial performance of M7’s investments.

• While M7 emphasizes sustainability, environmental risks could still impact the value of assets.
  Changes in regulations or unforeseen environmental issues may pose challenges.

• M7 operates in various countries, and global economic conditions may impact the performance of its investments.
  Economic downturns, political instability, or currency fluctuations could affect returns.

• The long-term success of M7 Real Estate may be influenced by the effectiveness and stability of its leadership team.

Leadership changes could impact the company’s strategic direction and performance.

Investors should conduct thorough due diligence, carefully review investment documents, and consider seeking advice from financial professionals.

This helps to understand and mitigate potential risks associated with investing with M7 Real Estate or any other investment firm.

Related Content:

Why Invest In Commercial Real Estate

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Where is Some of the Cheapest Land for Sale in the World?

Best Real Estate Investment Options

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Bottom Line

M7 Real Estate is a prominent pan-European investor and asset manager in Europe.

It stands committed to excellence in sustainability, innovative asset management strategies, and fostering enduring relationships.

Its diverse portfolio spans industrial, retail, and office sectors.

M7 consistently delivers value to investors through strategic sales, environmental due diligence, and proactive waste management initiatives.

M7 actively contributes to environmental stewardship while aligning with global climate change objectives.

The company is known for emphasizing sustainable practices, energy efficiency, and alternative transportation.

The company’s success is underpinned by:

• A robust culture
• A seasoned team spanning multiple countries
• A dedication to achieving optimal results for investors, tenants, and local communities

M7 Real Estate’s bottom line is a fusion of financial success, environmental responsibility, and a commitment to creating lasting positive impacts in the real estate industry and beyond.

Furthermore, M7 Real Estate Limited acts as an appointed representative for M7 Real Estate Financial Services Limited.

M7 Real Estate Financial Services Limited is authorized and regulated by the FCA (Financial Conduct Authority).

That being said, I strongly hope that the information in this article helped you understand the services offered by M7 Real Estate.

This article also comprised the information regarding the advantages and disadvantages of investing with M7, which will let you make informed decisions.

Always make sure that you contact an efficient financial advisor or investment expert before proceeding with your investments.

If you are looking for an expat financial advisor or wealth manager who can help you with your investments, I can be of assistance.

I have guided several expats and high-net-worth individuals to attain financial independence with my tailored investment strategies and financial planning services.

Feel free to reach out to determine whether or not you can benefit from my expert wealth management solutions.

Pained by financial indecision? Want to invest with Adam?

Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.