Savills IM launches European Logistics Fund 3

23 September 2019

The international real estate investment manager Savills Investment Management (Savills IM) has launched another German real estate special fund for institutional investors, Savills IM European Logistics Fund 3 (ELF 3). The strategy focuses on investments in high quality distribution centres and cross-docks that can be used by third parties in Europe's core liquid logistics markets. With a target investment volume of at least EUR 600 million and a maximum debt ratio of 50%, the fund targets an income return of at least 5% annually. The fund has already received capital commitments of EUR 122 million from two German institutional investors at first close.

The investment style of the open-end special alternative investment fund (Spezial-AIF) is core/core-plus, although selected properties with asset management potential may also be considered. The strategy envisages the greatest possible diversification in terms of geography and different user segments, including industry, trade and services. A first distribution centre in Wrocław (Poland) with an investment volume of around EUR 35 million is already being examined for purchase. 

The predecessor fund, European Logistics Fund 2 (ELF 2), was closed to new investors at the beginning of 2019. With EUR 560 million of capital it raised more than twice the originally targeted EUR 250 million. With a total return of around 7.9% per annum since its launch in July 2015, ELF 2 has also exceeded its return targets. ELF 2 currently holds a total of 22 logistics properties in six countries with an investment volume of around EUR 645 million.

Since the beginning of the year, eight purchases have been made for the fund and a purchase agreement has been signed for a logistics complex under construction in the Nuremberg metropolitan region, which will be transferred to the portfolio after completion in Spring 2020. Together with other properties that are currently being reviewed for acquisition, the fund will grow to a volume of almost EUR 900 million. 

Daniel Hohenthanner MRICS, Director Investment at Savills IM, says:

“The fundamentals in Europe’s logistics sector remain buoyant. E-commerce is currently forecast to grow by EUR 220 billion by 2022. This is reflected in continued strong demand for logistics properties and a very low vacancy rate leading to rising rents.

We have specialist teams in local markets, giving them rapid access to properties coming onto the market and off-market transactions. Through ELF 2 we have proven our expertise in deal-sourcing and bringing transactions to a successful conclusion quickly. As a result, a property pipeline for ELF 3 is already built.”

Rena Knöpke, Head of Business Development for Germany, Austria and Switzerland at Savills IM, adds: 

“The overwhelming response by investors to ELF 2 has helped to make it one of Savills IM’s flagship funds. The strategy has convinced investors. Due to the continuing high demand, we are pleased to be able to offer another pan-European logistics strategy for institutional investors. Similar to its predecessor, ELF 3 will focus on core and core-plus properties. Due to the advanced investment cycle, the addition of properties with asset management potential is also planned.”





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