Europa Capital and Cromwell launch German logistics joint venture with €150 million target GAV

Europa Capital, the pan-European real estate investment manager, on behalf of its latest value-add fund, and Cromwell Property Group (Cromwell) have launched a German logistics joint venture (JV) with a target GAV of €150 million.

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. The JV recently made its first investment, acquiring a 12,000 sqm 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 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.

Jason Oram, Partner, Fund Manager at Europa Capital, added: “We have seen a significant increase in the demand for light industrial and last mile logistics assets from institutional investors. 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 sector has proven its resilience during the pandemic, evidenced by the high levels of rent collection we have recorded across our wider portfolio and we firmly believe that rents will grow for well-located assets within this sector over the course of our hold period in this venture.”

James Farmer, Partner, Origination & Acquisitions at Europa Capital, commented: “Strong occupational demand is being driven by a growing need for distribution space, which is putting upward pressure on rents and creating favourable conditions for us to reduce existing vacancies and improve valuations over the anticipated holding period of this platform. Continental Europe lags the US & UK in terms of e-commerce penetration and we believe that this will be a substantial driver of performance in the logistics sector in countries such as Germany over the next five years and beyond. We look forward to working with Cromwell’s team on-the-ground in Germany to source the right opportunities as we assemble a strategic portfolio on behalf of our investors.”

Michael Bohde, Head of Germany at Cromwell Property Group, commented: “We are delighted to be partnering with Europa Capital in order to build an attractive and marketable portfolio of assets over a four to five-year time horizon. 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.”