Global real estate investor PGIM Real Estate and pan-European investor M7 Real Estate have created a €100 mln joint venture focused on industrial and logistics properties in Germany.
The venture aims to acquire assets in prime locations and enhance their value through redevelopment and leasing.
Two properties, totaling over €40 mln, have already been secured. The first asset is located in Mulheim and is currently leased to two tenants, occupying 75% of the space. There is potential to increase occupancy by leasing the remaining vacant area and constructing an additional 10,000 m2 of space.
The second property is a multi-unit logistics park located in Munster that was purchased through a short-term sale and leaseback agreement. The venture intends to renovate the building and lease it out to new tenants.
PGIM Real Estate is contributing to the joint venture through its European value-add strategy, which prioritizes urban logistics as a key asset class.
Nabil Mabed, senior portfolio manager of European value-add strategy and head of France, Spain and Portugal, commented: ‘The correction in European real estate values over the last two years has been more acute than in any other region, and we have now reached a historic entry point. Logistics and industrials in prime locations continue to demonstrate strong market fundamentals and attractive value-add opportunities, but it is more important than ever to be selective when investing capital.’
John Pow, managing director of M7 Real Estate, added: ‘We have continued to see demand for German light industrial and last mile logistics assets from occupiers and investors alike. The sector has remained resilient, and we firmly believe that rents will continue to grow for well-specified and well-located assets within the sector over the coming years. We are excited to work with our new partners, PGIM Real Estate, on this strategy and are confident we can assemble a market-leading portfolio over the coming months.’
