Three Investors Buying Logistics Real Estate For Their Portfolios

Three Investors Buying Logistics Real Estate For Their Portfolios

Logistics properties are buildings used for storing, sorting or distributing goods. In terms of building type, these are warehouses – usually with larger areas from 5,000 sqm upwards. Sometimes logistics properties also include office space or other commercial space.

Logistics real estate that can be used as an alternative for low-level production and has multiple purposes is often referred to as light industrial real estate or light designated industrial real estate. However, not every logistics property is a light industrial property and there are light industrial properties that are not logistics properties. In this respect, the two terms are not congruent, but there is also no clear-cut distinction.

Investments in logistics real estate have become much more important in recent years. This is due in large part to the e-commerce boom. The dynamic development of Internet trading is creating a growing demand for logistics space to ensure that buyers are supplied with the exact goods they need. According to the commercial real estate service provider Colliers International, around EUR 6.8 billion was invested in logistics and light industrial real estate in Germany in 2018. In 2017 the figure was 8.7 billion euros. The decline is not due to a lack of interest but to a lack of opportunities and fewer portfolio deals. This year, there were also some remarkable investments and transactions with significant German participation – both in Germany and abroad.

1. PATRIZIA Immobilien AG – Engagement in the Netherlands

PATRIZIA Immobilien AG is a real estate investor founded in 1984 and based in Augsburg. The company organizes and manages real estate investments for private and institutional investors. Within this framework, PATRIZIA Immobilien purchases both residential and commercial real estate. Financing is provided through open and closed investment funds, alternative investment funds and club deals. PATRIZIA Immobilien is also involved as a co-investor where appropriate. The assets under management amounted to around 41 billion euros at the end of 2018. While the investment activities were originally concentrated in the Augsburg-Munich area, the activities have expanded geographically over time.

Today, PATRIZIA Immobilien describes itself as a pan-European investor that looks beyond the borders of the continent. The investments of 2019 include an investment in the Netherlands in a logistics real estate portfolio. In the first half of the year a total of 131,000 sqm of logistics space in Rotterdam, Moerdijk and Bergen op Zoom was acquired from the Dutch real estate investor and developer DHG. The transaction amounts to EUR 130.8 million. The properties are allocated to the “PATRIZIA Logistik-Invest Europa II” fund. They are located on the logistically important southern corridor from Rotterdam to Antwerp and Belgium. Some of the space is suitable for handling hazardous goods, which is a lucrative part of the market.

2. Nagel Group SE & Co. KG with Cruzon Capital Partners and Barings – Sale and Leaseback in Food Logistics

The Nagel Group in Versmold, Westphalia is a food logistics company with a long history operating throughout Europe. The family business was founded in 1935. The core business is food transport – by land, sea and air. In addition, the Nagel Group is involved in procurement logistics, contract logistics, warehousing, order picking, packing and other value-added services. In the 1980s, the company began to develop foreign markets. Today, Nagel is represented by subsidiaries in large parts of Europe.

The real estate logistics deal presented here was not about buying, but selling real estate with simultaneous leaseback – 0r, in jargon, “sale and leaseback”. Such transactions often serve to gain liquidity and improve the appearance of the balance sheet. In Nagel’s case, the sale was also intended to give the company greater strategic flexibility. At the end of March, the Nagel Group reached an agreement with the two buyers, the Core+- Fund “Cruzon Capital Partners 5 LL (CCP 5 LL)” and Barings, representing an institutional investor, on the transfer of a total of 34 properties with an area of 260,000 sqm. 26 properties are located in Germany, 8 in Denmark. CCP 5 LL takes over 27 properties, Barings 7, and the long-term leaseback by Nagel is secured.

3. Union Investment AG – Purchase of a logistics real estate portfolio from TST

Union Investment is one of the largest German investment companies and belongs to the Volks- und Raiffeisenbanken group. They also handle real estate funds. Within this framework, Union Investment invests primarily in commercial real estate. Following this year’s purchases, the logistics real estate portfolio comprises 22 properties and projects with a market value of around 1 billion euros. Union Investment holds a total of around 300 properties in 24 different countries.

Announced in September, the deal with the logistics service provider Trans Service Team (TST) concerns one existing logistics property and three project developments in the Ruhr area and in Rheinhessen. The aim is to increase the real estate portfolio of the UniImmo fund – an open-ended public fund of the subsidiary Union Investment Real Estate. The portfolio property in Dortmund has a rental area of around 24,000 sqm. Another property with 17,000 sqm of space is also being built in its vicinity. The two other project developments are part of a 30,000 sqm logistics centre in Bönen to the east of Dortmund and a logistics property with 49,000 sqm of space in Worms. The transaction amounts to around 120 million euros.

Picture source: Marcin Jozwiak

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Originally posted on April 28, 2020 @ 12:43 pm


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