This article is from the Australian Property Journal archive
CROMWELL and Korean real estate investment manager, IGIS Asset Management have teamed up to buy seven DHL logistics assets in Italy for A$85.7 million (€52.5 million).
The assets will form the seed portfolio for a new Cromwell European Logistics Fund, which will focus on core+ logistics assets throughout Benelux, France, Germany and Italy, with a target total Gross Asset Value (GAV) of €400 to €500 million (A$650 to A$800 million).
Cromwell chief investment officer Rob Percy said logistics is a ‘high conviction’ sector that will prove resilient in these difficult times and with strong potential for outperformance over the medium term.
“We are excited by our new capital partnership with IGIS and the opportunity to launch a new European Logistics Fund.
“The demand for logistics assets is likely to continue to increase, supported by long term structural and demographic trends, especially in urban locations where supply is constrained,” he added.
Located in northern Italy, the wealthiest area of the country, near the cities of Milan, Turin, Bologna and Verona, the seven properties are fully let to DHL on long-term leases with an overall portfolio WALT of 16 years. Two of the seven logistics centres are brand new.
Cromwell’s head of Italy Lorenzo Caroleo said the new acquisitions will increase Cromwell’s exposure to the logistics sector which has with excellent fundamentals, located in the strongest economic regions of Italy.
“The urban logistics sector in Italy is characterised by a significant supply/demand imbalance and a supply chain that needs upgrading to keep pace with the needs of modern logistics providers. By acquiring this portfolio, fully let to a multi-national business such as DHL, we are able to tap into this opportunity on behalf of Cromwell and our capital partners globally.”
“We look forward to deploying further capital in the sector as further opportunities arise, both in Italy and elsewhere in Europe,” he added.
IGIS senior vice president Sei-hyun Kwon said this acquisition is an excellent example of the type of logistics assets the group is looking to invest in.
“We have been observing rapid growth of E-Commerce and express courier market in Italy for quite some time. Understanding how tough it is nowadays to identify this type of logistics portfolio in strategic locations, we are very fortunate to be able to work with Cromwell who provides us with the sort of on-the-ground asset and investment management expertise that is so important to ensure success as we continue diversifying our exposure to Europe.” Sei-hyun said.
Percy said this exciting new initiative is another example of our ‘Invest to Manage’ strategy. The strategy has seen Cromwell launch the Cromwell European REIT in Singapore, LDK Seniors Living and partner with BlackRock at 475 Victoria Avenue, Sydney.”
“Our pipeline now consists of a number of exciting opportunities including the new Logistics Fund, Cromwell Polish Retail Fund and also the proposed Stratus Cromwell Data Centres Fund,” he concluded.
