Cromwell enters JV in Italian logistics with Value Partners

Cromwell Property Group has entered into a joint venture with Value Partners, selling the Hong Kong-based asset manager a 50% stake in the Cromwell Italy Urban Logistics Fund for €27.9 million.

The seven properties that make up the fund are 100% leased to DHL and are all located in prime logistics markets in Northern Italy, near the key transport hubs of Milan, Turin, Bologna and Verona.

The acquisition is Value Partners’ first investment in Europe.

“This expansion and geographical diversification of our logistics portfolio will deliver exciting opportunities for growth and profitability for our investors,” said Rachel Tong, managing director, head of real estate private equity, Value Partners Group. “Italy is an important logistics hub in Europe and we are confident of stable returns.”

“We will continue to focus on simplification of the business through our non-core asset sale process, including those assets in the Cromwell Polish Retail Fund, as well as some additional non-core assets in Australia, applying proceeds to debt reduction in the first instance to ensure security through an ongoing difficult operating environment,” said Jonathan Callaghan, CEO, Cromwell.

The Italian assets were identified as non-core to Cromwell’s business in 2022 and, as a result, the group actively marketed them for sale or co-investment. Cromwell said the deal which values the fund’s portfolio at €55.8 million reflects an approximate 9.4% increase on Cromwell’s initial purchase price. 

Cromwell’s Italian team will continue managing the portfolio, that has a gross lettable area of 46,000 sq m. The seven assets are used by DHL’s Supply Chain, Express and Global Forwarding divisions, providing portfolio income diversification and protection across business cycles.

“Having owned and managed this portfolio since 2020, we have an excellent understanding of the assets, the occupier, and the demand for these types of assets across the north of Italy,” said Lorenzo Caroleo, head of Italy, Cromwell. “The joint venture with Value Partners would allow us to grow this portfolio with selective acquisitions of urban/last mile logistics assets, leased to occupiers with strong covenants, that are located near the major urban hubs in Italy and other cities in Europe.”

Australia-based Cromwell group has offices in 11 countries in Europe, where it manages €3.9 billion of real estate assets.