Alpha seeks to strengthen TK Maxx partnership

Cologne-based Alpha Industrial is working on enlarging its partnership with discount retailer TK Maxx through a second major distribution centre project in Continental Europe. In October Alpha handed over a 45,000-m² distribution centre to TK Maxx in Bergheim, Germany.

TK Maxx has more than 40 stores in Germany and has ambitious plans to grow the network across Europe's largest market over the next years. The Bergheim centre, managed by Alpha, will supply TK Maxx's entire German network from December this year. This creates up to 1,000 new jobs in Bergheim till 2013. The facility can also be expanded by a further 10,000 m².

Alpha specialises in investment, development, leasing and asset management of real estate for industrial enterprises, logistics and transport companies, and retailers. Among others they developed the German headquarters for the worldwide leading manufacturer of diesel engines, Cummins, and realised the biggest logistics investment in Germany in the last three years with more than 55,000 euro pallets for stock-listed Fresenius Medical Care, the world's largest integrated provider of dialysis products.

The company's relationship with TK Maxx began in November 2009 during a tendering process involving 11 investors. ‘Both sides realised in our first meeting that we had nearly the same chemistry. The good thing is we were not the cheapest but we could generate the kind of trust relationship that was important to TK Maxx,’ Schröder said.

The retailer 'discovered' Germany in the year 2000, when they founded an acquisitions office. In 2007, after intensive market research, they opened the first store and operated through small retail premises in the largest. German distribution was done from the UK. As the retailer sees enormous opportunities for growth and a long term potential to grow to 250-300 TK Maxx stores in Germany alone, they decided to create a new state-of-art processing centre. ‘Incidents like blockages of the Eurotunnel confirmed that this was the right decision,’ Schröder said.

Alpha was established by industrial property veterans in 2007. As managing director of Prologis Germany, Schröder built up its presence in from the outset in 1999 to make it Germany's market leader in 2007 and was part of the European team.

Alpha took on three major projects in its first six months of its launch but 2008 was ‘horrible’, according to Schröder. ‘We learned in that period that you had to have several trusted partnerships, different foundations for our business model, in case a partner might draw back’.

Since then Alpha has developed partnerships with real estate investor AEW, shopping centre specialist ECE; Carval Investors, Alpha’s shareholder; and Credit Suisse, as one of its end-investors.