Cromwell grabs suite of DHL logistics assets for $86m
29 July 2020, Written by Business News Australia
Cromwell Property Group (ASX: CMW) have partnered with a Korean investment manager to acquire seven DHL logistics properties in Italy for $85.7 million.
The acquisition will form the seed portfolio for a new Cromwell European Logistics Fund, targeting core logistics assets in France, Germany and Italy with a gross asset value of $650 to $800 million.
Cromwell chief investment officer Rob Percy says the deal, made in partnership with IGIS Asset Management, will prove resilient despite the current market conditions.
"Logistics is a 'high conviction' sector that we believe will prove resilient in these difficult times and provide our capital partners with strong potential for outperformance over the medium term," says Percy.
"We are excited by our new capital partnership with IGIS and the opportunity to launch a new European Logistics Fund.
"The demand for logistics assets is likely to continue to increase, supported by long term structural and demographic trends, especially in urban locations where supply is constrained."
Located in northern Italy near the cities of Milan, Turin, Bologna and Verona, the seven properties are fully let to DHL on long-term leases with an overall Weighted Average Lease Term of 16 years.
Two of the seven logistics centres are brand new while the other five properties are have been occupied by DHL since their construction.
"We are delighted with these new acquisitions, which increase Cromwell's exposure to the logistics sector through seven assets with excellent fundamentals, located in the strongest economic regions of Italy," says Cromwell's head of Italy, Lorenzo Caroleo.
"The urban logistics sector in Italy is characterised by a significant supply/demand imbalance and a supply chain that needs upgrading to keep pace with the needs of modern logistics providers.
"We look forward to deploying further capital in the sector as further opportunities arise, both in Italy and elsewhere in Europe."
Shares in Cromwell are down 0.56 per cent to $0.88 per share at 2:19pm AEST.
Business News Australia
Author: Business News Australia