Investec Fund grows European logistics exposure


Investec Fund grows European logistics exposure

Published Date: 2020-02-12 | Source: Stephen Gunnion | Author: Stephen Gunnion

Investec Fund grows European logistics exposure

The property fund has increasing its stake in its Pan European Logistics platform as it takes advantage of growth in e-commerce.

Investec Property Fund (IPF) has finalising a deal to increase its stake in its European logistics joint venture as it reduces its exposure to SA property.

The real estate investment trust will spend €191 million to raise its ownership of the Pan European Logistics (PEL) property portfolio to around 75% from its current 42.9%. It's buying the additional state from the Real Estate Group of Ares Management Corporation. As part of the deal, it will introduce a new strategic equity partner for the remaining 25% stake and the portfolio will operate on a joint control basis going forward.

The portfolio consists of 45 logistics properties across six European countries worth €900 million. It has grown like-for-like net operating income by more than 20% since inception in March 2018, with strong demand for logistics property due to rapid growth in e-commerce across Europe. The fund will consolidate two logistics properties in Belgium it bought for €70.4 million last December into the portfolio once the deal has been completed.

The fund's growing offshore exposure has cushioned it from subdued growth in SA. In the six months to end-September, the European logistics platform delivered a 20.1% total return and Investec Australia Property Fund (IAPF) returned 27.4% on the back of its listing on the Australian Securities Exchange in May. It made an initial investment of €10 million into a new Pan-European light industrial platform during the second quarter of its financial year.

Last month it sold its stakes in the Musina Mall in Limpopo and Boitekong Mall in Rustenburg for R727 million as part of the offshore diversification strategy.

Taking into account the Belgian acquisitions and the SA disposals, the additional stake in the PEL portfolio will take its offshore exposure from 23% to 30%, and 45% on a look-through basis.

Separately, IPF raised around R875 million in an accelerated bookbuild yesterday, up from a minimum of R500 million it planned to raise, and will issue 68.6 million new shares at R12.75 each.

Its shares fell 3.5% to R12.84 yesterday.

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