Warburg-HIH Invest and Nord/LB to Set up New Logistics Real Estate Fund

Planned fund volume of 250 million euros

Dividend yield between 4.5 and 5.5 percent

Equity stakes of 2.5 million euros or more

Focus on key locations in Germany

Hamburg, 19. January 2019 – In a collaborative venture, the state bank Nord/LB and Warburg-HIH Invest will launch a new logistics real estate fund called Warburg-HIH Deutschland Logistik Invest. The openended special AIF will invest exclusively in German logistics real estate. Assuming a fund volume of around 250 million euros and a gearing ratio of 45 percent, the fund is expected to return a dividend yield between 4.5 and 5.5 percent. Institutional players may invest in the fund by acquiring equity interests of 2.5 million euros or more

“The fund will invest in modern distribution and transshipment centres with alternative use potential, located in established sites throughout Germany,” said Alexander Eggert, Managing Director at Warburg-HIH Invest. “The asset value of the properties, which are occupied on long-term leases, ranges from ten to 40 million euros. It is planned to add some properties with optimisation potential to boost the performance.”

Logistics is the most important economic sector in Germany after the automotive industry and retailing, and subject to fast growth. “The main factors driving the increase in the movement of goods are global economic growth, the increasing product diversity and the rising significance of e-commerce,” said Andreas Strey, Senior Fund Manager at Warburg-HIH Invest. “The demand for space generated by these trends is matched by a low floor space supply, the result being that vacancy rates are very low and that rents in the central logistics regions are subject to a stable trend.” He added that this development is unlikely to show any significant changes in the foreseeable future. In 2017, roughly 1 million square metres of logistics space were completed in the “Big 5” cities, only about 16 percent thereof developed on speculation. Strey went on 2/2 to say that the low level of speculative building activity and the limited replicability of warehouses at top locations should be blamed on the short supply of available land zoned for logistics and should be seen as precondition for a stable value performance of existing logistics properties.

“The fund will invest in modern distribution and transshipment centres with alternative use potential, located in established sites throughout Germany. The asset value of the properties, which are occupied on long-term leases, ranges from ten to 40 million euros. It is planned to add some properties with optimisation potential to boost the performance.”

Alexander Eggert, Managing Director

Warburg HIH Invest

“The main factors driving the increase in the movement of goods are global economic growth, the increasing product diversity and the rising significance of e-commerce. The demand for space generated by these trends is matched by a low floor space supply, the result being that vacancy rates are very low and that rents in the central logistics regions are subject to a stable trend.”

Andreas Strey, Senior Fund Manager

Warburg HIH Invest