AG Real Estate acquires France’s largest logistics property

AG Real Estate, the property arm of Belgian insurer AG Insurance, has acquired what is being billed as France’s largest-ever logistics building from French developer PRD for €65 mln.


‘It is the biggest logistics property in France - or even in Europe - sold to an investor,’ said François Le Levier, head of capital market logistics at CBRE in Paris, who advised the seller. According to an analyst, who asked not to be identified, the deal is likely to reflect an initial yield of around 7.5%.

Construction on the building, which will total 113,000 m2, is due to start in November. It will be located near Marseilles in Saint-Martin-de-Crau. The property is being ‘built to suit’ for French DIY and home improvement retailer Castorama and is due to be completed before the end of 2014, Le Levier said. It is the second property that PRD has developed for Castorama, following a 70,000 m2 logistics property in Paris.

‘The logistics deal volume has increased by 20% a year since 2007,’ Le Levier said. ‘There were around €800 mln in logistics deals transacted in France last year; this year, I expect it to be even higher.’

The massive wall of capital chasing investment is propelling investors towards less mainstream asset classes as they struggle to find enough investment opportunities. According to Le Levier, investors have earmarked around €10 bn to spend on logistics in Europe within the next three years. ‘We are seeing a lot of investor interest but demand is higher than supply, which is going to put pressure on yields going forward,’ he said.