Europa Capital and Cromwell are betting on the continuing strength of the Logistics market in Germany and expect rents to rise.
The pan-European real estate investment manager, on behalf of its latest value add fund, and Cromwell Property Group have launched a German logistics joint venture with a target gross asset value of €150 million.
The JV recently made its first investment, acquiring a 12,000 sq m warehouse property near Cologne and is currently undertaking due diligence on other assets as it continues to build a strong pipeline of future investments.
The joint venture will target logistics assets and portfolios across Germany with individual lot sizes starting from €8 million where Europa Capital and Cromwell can leverage their combined active asset management expertise to create value.
“We have seen a significant increase in the demand for light industrial and last mile logistics assets from institutional investors”, said Jason Oram, partner, fund manager, Europa Capital. “Real estate allocations have started to shift away from sectors which have been adversely affected by ongoing structural changes in the industry and the Covid-19 pandemic towards the logistics space, where we are able to leverage our track record”.
The JV builds on Europa Capital’s track record of establishing similar platforms across Europe, including in the UK, the Netherlands and Germany in order to capitalise on the demand for warehouse assets where there is tight supply due to strong demand and limited land availability.
“The logistics sector has proven its resilience during the pandemic, as evidenced by the high levels of rent collection we have recorded across our wider portfolio”, said Oram. “We firmly believe that rents will grow for well-located assets within this sector over the course of our hold period in this venture”.
Continental Europe lags the UK in terms of e-commerce penetration and the two companies believe that this will be susbstantial driver of performance in the logistics sector in countries like Germany over the next five years and beyond.
“As the largest light industrial and logistics market in Europe, Germany provides investors with exposure to a stable macro-economic environment, yields and well-established international brands”, said Michael Bohde, head of Germany, Cromwell Property Group. Europa Capital, which was founded in 1995, is majority owned by Mitsu