EUROPE – Canada’s PSP Investments and the UK’s SEGRO have bought a €472m portfolio of prime logistics assets and development land in Germany, Poland and France through their joint venture.

SEGRO European Logistics Partnership (SELP) – owned equally by the two parties and completed last year – has agreed to buy the assets from two funds.

One is managed by Tristan Capital Partners (CCPIII), while the other is co-managed by Tristan Capital Partners and AEW Europe (EPISO).

Rui Tereso, partner and head of portfolio and asset management at Tristan Capital Partners, said: “This exit bears out our thesis that core private and public investors would dramatically increase their appetite for European logistics opportunities as the European economy begins to recover.”

The portfolio consists of 14 prime, modern logistics assets – 10 in Germany, three in Poland and one in France – covering approximately 679,000sqm of lettable space, SEGRO said.

It includes one 13,250sqm building under construction in Leipzig and 51 hectares of development land in Germany, it said.

The purchase price reflects a 7.1% net initial yield on the standing investments, and an equivalent yield of 7%, it said, adding that the portfolio now produces €31.6m of contracted annualised net rental income.

By area, 80% of the properties were built in the last five years, and the weighted average lease is just over six years, it said.

The vacancy rate is 4%.

Tenants of properties in the portfolio include Deutsche Post, Nagel Group, DB Schenker and Geodis.

It is due to be finished in the first quarter of this year, at which point SELP will buy it for about €9m, with the vendor guaranteeing rent for two years if it is not pre-let by completion.

SELP will fund the acquisition when it completes, in line with its policy of having a loan-to-value ratio of around 40%, SEGRO said, adding that the deal was not subject to financing.

The UK company said it would fund its net equity contribution to the purchase of around €142m from existing cash.

The deal is expected to complete in the second quarter of this year, subject to certain conditions, SEGRO said.

PSP Investments manages assets for several Canadian public sector funds.

In addition to owning 50% of the joint venture SELP, SEGRO acts as its asset, property and development manager.