Cromwell Property Group and Korean real estate investment manager IGIS Asset Management are to jointly purchase seven logistics assets in Italy for A$85.7m (€52.5m) to seed a new logistics fund.
Cromwell plans to launch a new Cromwell European Logistics Fund in the fourth quarter of this year to focus on core-plus logistics assets throughout Benelux, France, Germany and Italy, with a target total gross asset value of €400m to €500m.
Cromwell’s CIO, Rob Percy, said: “Logistics is a ’high conviction sector that we believe will prove resilient in these difficult times, providing our capital partners with strong potential for outperformance over the medium term.”
Percy told IPE Real Assets there might be many other players in the logistics market in Europe, but the key difference with Cromwell was the firm’s ability to source assets through its network of 200 employees there.
“DHL is a client of ours and it came to us with the opportunity to acquire this portfolio,” Percy said.
The portfolio of new buildings is located near the northern Italian cities of Milan, Turin, Bologna and Verona. All are leased to DHL on long-term leases, with an overall portfolio WALT of 16 years.
According to a person familiar with the matter, the transaction is expected to close in September.
”It would have been settled sooner, but the transaction stalled due to the outbreak of the COVID pandemic,” the source told IPE Real Assets.
On capital raising for the new fund, the source said: “Cromwell manages big businesses in Australia and Europe, where it would raise capital and IGIS will work with Cromwell to raise future funding from Korean institutional investors.”
The source said IGIS had no plans to parlay its interest in the DHL portfolio into a stake in the new logistics fund.
“At this stage, IGIS and Cromwell are simply warehousing this DHL asset to seed for future collaboration.”
Percy said a number of potential institutional investors had shown interest (in the fund) and were poised to begin their due diligence when the fund was launched.
He added that generally for an unlisted wholesale trust, Cromwell would look to retain a 20% to 30% stake in the medium-to-long-term. This included the recently-launched Stratus Cromwell Data Centres Fund, he added.
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