Savills Investment Management, on behalf of Korean institutional clients, has acquired a logistics property in Poland for €65.5 mln from industrial specialist Tritax EuroBox.
Tritax said that the Lodz deal represented a 4.95% gross initial yield, and that the sale price was 15% above the property's most recent 30 September valuation, delivering a 16.5% IRR per annum to shareholders.
Savills IM noted that the asset had been purchased on behalf of the Vestas European Strategic Allocation Logistics Fund (VESALF I), raised solely from Korean funds to focus on European property.
Tritax acquired the asset in Strykow, 15 km northeast of Lodz, in 2019 at a purchase cost of €55.0 mln, or a gross initial yield of 5.80%. The 101,555 m2 property is leased to French DIY chain Castorama, part of Kingfisher, with a remaining lease term of 6.7 years.
Nick Preston, fund manager of Tritax EuroBox, commented: 'This sale of one of our earlier acquisitions has delivered strong returns to our investors.
'The successful completion in May 2019 of the forward funding pre-let development opportunity to expand the existing site in Lodz by a further 52,000 m2, means we are in a position to crystallise a profit from a now stabilised asset, with a view to recycling the capital into higher returning investment opportunities.
'We can deploy this capital quickly due to a number of attractive opportunities both within the existing portfolio, and also from the pipeline of potential acquisitions secured from our asset management and development partners.'
Following its IPO on the London Stock Exchange just over two years ago, the firm has built up a portfolio of 13 large-scale logistics assets, all strategically located close to urban centres. Tritax EuroBox is now fully invested across six core countries, with a portfolio valued at €870 mln as of 30 September.
Tritax said it was particularly keen to expand its presence in the German market which it views as the most important, influential and robust in Europe. Its partner in Germany is Dietz, which has to date delivered six assets within the current portfolio.
Other key markets include the Netherlands, which is experiencing strong e-commerce growth, and Belgium, characterised by low vacancy and insufficient supply, where it works in partnership with developer LCP.
Preston added: 'Online retailing has exploded in the past year with most markets in Europe reporting growth of as much as 50%. Covid-19 has conflated 10 years of evolution in ecommerce into just one year, which explains why investor interest in logistics real estate has turned red hot.
'In this environment we have to be more thoughtful about how to continue delivering strong returns and are therefore recycling capital into more value-accretive assets. Lack of available stock is the prime constraint for investors in this market, but that doesn’t apply to EuroBox, as we have an extremely strong forward pipeline and are sitting in a ‘sweet spot’ compared with most of the rest of the European logistics real estate sector.'
