AEW acquires airport logistics asset in Copenhagen for German pension fund

Global real estate investment manager AEW has purchased an airside logistics asset at Copenhagen airport from private equity firm Palm Capital on behalf of a separate account mandate backed by a German pension fund.

Financial details were not disclosed, but market sources said the asset is believed to have changed hands for around €90 mln.

In a report tipping the deal in April, PropertyEU said Palm Capital had instructed CBRE’s local office in Denmark to seek an exit on the property with a guide price of around €80 mln.

Situated directly adjacent to the airport’s runways, Copenhagen Cargo Centre comprises a total lettable area of 26,500 m2, including 18,500 m2 of warehouse space and around 5,700 m2 of offices across three units, with 258 car parking spaces. Developed and expanded between 1992 and 2009, the property is almost fully let to freight firms DHL, PostNord and Worldwide Flight Services (WFS).

The asset carries a weighted average lease to expiry of seven years.

Palm Capital acquired the property in an off-market deal in 2018 before undertaking a comprehensive asset management programme to reposition the asset. It secured WFS as a tenant for the vacant portion within six months of acquisition.

It also re-geared the leases of DHL and PostNord, as well as obtaining approval for a 5,000 m2 warehouse expansion with direct airside access. Construction of this additional unit is expected to begin at the end of 2021. 

Since acquisition, several initiatives have been undertaken to improve the energy efficiency and environmental performance of the asset, including designing the warehouse expansion to target BREEAM Very Good.

Reda Khatim, managing partner at Palm Capital, said: 'The Copenhagen Cargo Centre investment was part of our pan European manage-to-core logistics strategy. This was a unique logistics asset in a strategic location, which had committed tenants as well as significant asset management potential. Having acquired this property off-market in a distressed situation, we were able to execute on our business plan to create an institutional quality asset and thereby deliver strong returns for our investors.'

Copenhagen’s Airport Kastrup is the largest airport in the Nordics and acts as a key hub for major international freight companies in Scandinavia and Northern Europe. Due to its flight path being over the sea, the airport is in the rare position to be able to operate 24/7. The property benefits from excellent multi-modal accessibility, not only from air freight, but also the E20 highway, which connects Copenhagen to Sweden and wider Denmark, as well as being next to a train terminal.

Lars-Henning Pylla, fund manager at AEW, commented: 'Copenhagen Cargo Centre is a strategically located logistics asset, enabling occupiers to cater to major cities crossing both Sweden and Denmark.

'Situated airside at Copenhagen Airport, the asset provides rare direct access to the cargo area, as well as excellent multi-modal connections. With a strong line-up of occupiers, this acquisition generates sustainable income, which aligns with our client’s investment objectives, as well as offering an opportunity to add further value through development, which is already attracting occupier interest.'

AEW will undertake a refurbishment of the asset's vacant office space in line with the extension, as well as targeting a BREEAM ‘Very Good’ rating for the whole property in order to meet the mandate’s sustainability requirements. 

Having launched its first logistics fund in 1999, AEW is a leading investor in the sector, with 16.2% of its €72.8 bn under management invested in the asset class globally. In Europe, AEW manages a €6 bn portfolio of logistics assets, including light industrial, last-mile and big box units.

AEW was advised by Lundgrens and on technical matters by KHR. The vendor was advised by Accura and CBRE.


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