Mark, the pan-European real estate investment manager, has secured an initial €250m debt facility from global investment bank Citi to fund the first wave of acquisitions for the second fund of its urban logistics platform Crossbay.
Crossbay II is targeting a €2bn gross asset value portfolio.
Crossbay, which has an established presence in core European markets such as France, Germany, Spain, Italy and the Benelux region, will expand into new territories such as the UK, Sweden and Denmark through its new vehicle.
Crossbay’s second vehicle will acquire existing single-user last-mile facilities in major European gateway cities, focusing on assets in urban infill locations where rental growth is expected to be strongest.
Last month, Crossbay sold its first portfolio to the world’s largest warehousing owner-operator Prologis for close to €1.6bn, representing a stabilised exit yield of just under 4.25%. The transaction is the European largest warehouse portfolio sale to complete this year.
Marcus Meijer, CEO at MARK, said: “Urban logistics remains an attractive investment opportunity thanks to compelling demand/supply dynamics and clear long-term growth drivers, from the shift away from physical retail to online shopping to the reordering of supply chains in the wake of Covid-19 and recent geopolitical events.
“In many European markets, e-commerce penetration continues to lag behind the US, and we expect online sales to rise as a proportion of overall retail spending, while the predominance of inflation-linked leases in Europe means we are well positioned to weather the current higher inflationary environment.
“The urban logistics sector’s strong underlying fundamentals combined with the price dislocation we are seeing presents a unique buying opportunity, while ultra-low vacancy rates provide clear room for rental growth. Rents make up a tiny fraction of corporate occupiers’ supply chain costs compared to transportation. In an environment of high energy and fuel costs, this will increasingly incentivise occupiers to invest in well-located logistics assets close to population centres.
“Crossbay forms a key part of our multi-platform strategy and the platform’s unique structure and genuine pan-European network means we are well positioned to take advantage of repricing to quickly and competitively amass another institutional-grade portfolio of scale.”
Marco Riva, CEO of Crossbay and head of logistics at MARK, said: “Having acquired our first last-mile assets in 2018, Crossbay benefited enormously from an early mover advantage, which enabled us to create a market-leading pure-play urban logistics portfolio that attracted the attention of the world’s largest logistics owner and operator.
“To this day, Crossbay is still Europe’s only truly pan-European pure play logistics platform and there are huge advantages that come with this.
“The second Crossbay vehicle will build on the success of the first by leveraging our teams on the ground to execute more value-add and leasing initiatives to drive value and capture rental growth, and increasing development activity where appropriate, with all new developments built to meet our strict ESG requirements.
“The new facility provided by Citi, enabled by the strong relationship we established through the first Crossbay vehicle, will reinforce Crossbay’s market reputation for speed and certainty of execution.
“We have a solid pipeline of opportunity, but will deploy capital selectively, focusing exclusively on attractively priced assets at very healthy premiums to prime yields that we are able to access off-market through our embedded local teams.”