8 January 2020
The distribution centre is prominently located in Réau on the outskirts of Paris and in one of the strongest logistics locations along the La Dorsale logistics axis, which runs from Lille via Paris and Lyon to Marseille. It offers approximately 67,000 square meters of rental space and is fully leased to two logistics service providers on long-term agreements.
Barings acquired the property in November 2018 upon construction completion, on behalf of institutional investors. Barings successfully managed to secure the letting of the remaining space during Summer 2019. The property has achieved a BREEAM ‘Very Good’ rating.
This is the first acquisition for Savills IM on behalf of its newly launched ELF 3. The fund is an open-end German property specialty fund that invests in prime logistics assets in the liquid European core markets. The investment style is core/core-plus, although select properties with asset management potential may also be considered. The strategy seeks diversification in terms of geography and different occupier segments, including industry, trade and services. The fund is open to new investors.
A further distribution centre in Wrocław, Poland, with an investment volume of approximately EUR 33 million has been contractually secured for the fund. Two distribution centres in the Netherlands with a combined investment volume of approximately EUR 75 million are in advanced negotiations.
Savillis IM’s predecessor fund, European Logistics Fund 2 (ELF 2), was closed to new investors at the beginning of 2019. ELF 2 raised EUR 560 million in equity commitments –more than twice the targeted amount of EUR 250 million. ELF 2 is nearly fully invested, with only EUR 40 million equity remaining.
This is the second transaction for Savills IM with Barings in France. In April 2019, a logistics asset in Le Coudray-Montceaux on the outskirts of Paris was acquired.
Savills IM was advised by Jones Lang Lasalle, Wargny Katz, Gide Loyrette Nouel and Savills. Barings was advised by Oudot & Associés.
Daniel Hohenthanner, Director, Investment, at Savills IM, says:
We are delighted that we could secure as a first investment for our new logistics fund this Grade A distribution centre in one of the largest metropolitan regions in Europe. A second transaction for this fund in Wrocław has already been signed and is expected to be transferred to the fund in January. As a result, more than 40% of the current capital commitments would be invested shortly after fund launch. This again demonstrates our strength in securing and successfully implementing attractive logistics properties in a very competitive market environment.
Severine Maumy-Laffineur, Managing Director, Real Estate Country Head, France, Barings, said:
This sale completes our business plan much ahead of schedule and delivers exceptional returns for our investors. This validates our strategic approach to capitalise on the strong demand for prime logistics assets in the Paris region. This sale contributes to a strong year for Barings in France, with EUR 325 million of transactions completed in 2019.
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