Garbe Industrial Real Estate, the Germany-based company, has earned commitments totalling around €400 mln from German and international investors for Garbe Logistics Real Estate Fund Plus III (GLIF+III).
The Luxembourg special AIF is structured as an evergreen fund and is designated as an Article-8 category investment vehicle for Europe ESG purposes.
The fund is no small enterprise given it has a planned investment volume of €5 bn, and marks Garbe’s largest pan-European fund for institutional investors to date.
It is aimed at established logistics sites across Europe as well as selected growth regions.
In some cases it is pursuing value-add and development strategies in addition to its main core-plus strategy. Its seed portfolio consists of 22 assets with an investment volume of more than €650 mln and about 400,000 m2 of lettable area. Located in Germany (21 assets) and Poland (1), the properties show an occupancy rate of 95% and a WALT of more than ten years. Meanwhile, over €1bn worth of assets remain in the pipeline for GLIF+III. A second closing is therefore planned before the end of this year.
Christopher Garbe, managing partner, said: ‘We set up the GLIF+III during a very challenging market cycle. On the part of our clients, it is thus a remarkable sign of confidence in the logistics real estate market and in the fund strategy.’
‘This represents a strategic milestone and is the result of our active European expansion strategy.’
Jan Philipp Daun, managing director, pointed to the indexed rents of the properties acting like a ‘stabilising anchor during times of crisis’, offering a maximum protection against value erosion due to inflation.
‘It has been a lessor’s market that offers us a reliably strong demand for logistics space everywhere in Europe, meaning both in primary and specifically in secondary locations, and we are aware of additional rent upside here. You need to remember that rents, making up 5% of the overall costs, play a negligible role in the logistics industry in general and for our clients in particular.
‘The fund taps the principally robust market sentiment, and gives institutional investors an opportunity to participate in the ongoing logistics boom. Our well-filled project pipeline enables us to ensure speedy capital drawdowns despite the keen demand for logistics real estate.’
GLIF+III is targeting a net cash-on-cash return of 4% per annum and an internal rate of return (IRR) of 7%. institutional investors may buy into the fund with a minimum investment amount of €10 mln.
Linklaters advised on the fund launch. CBRE Capital Advisors helped on international sales outside Germany.
For the acquisition of the initial portfolio, the fund was also advised on legal and tax matters by Linklaters and Ernst & Young, while Drees und Sommer provided technical and ESG due diligence, Mohre Happ Luther were consultants providing financial due diligence and CBRE acted as acquisition advisor.
On the seller's side, Greenberg Traurig Germany was mandated for legal support, HLB Stückmann provided tax advice and BNP Paribas Real Estate accompanied the sales process.
