Apollo eyes €1b sale of pan-European logistics portfolio

US investor Apollo Global Management is seeking to attract bids of more than €1 bn for a portfolio of assets located mainly in the prime European logistics markets of Germany, Benelux and Poland.

The €1 bn price tag equates to an approximate 4.5% yield.

Apollo and its agent Cushman & Wakefield began discussions with key equity sources in August with a view to selling the portfolio of 28 assets before the end of the year.

It is the latest in a string of logistics portfolios to come to the market in the last six months across Europe. Its high quality is expected to attract investors looking to make a strategic move into the market and achieve scale and diversification in one deal. They could then bolt on more assets in other locations.

Sources said the portfolio could also be attractive to existing investors in the sector who might buy it as a defensive move, mindful of competition.

One said: ‘The portfolio is a true cross section of logistics properties from smaller cross-docking buildings to big boxes, covering the whole delivery chain.’

Apollo has been a conviction investor in logistics for two years, setting up a joint venture with industrial specialist Palmira Capital Partners in 2017. In August last year, Apollo obtained a five-year loan from Aareal Bank of up to €800 mln to finance the assets.

Cushman & Wakefield capital markets director James Chapman declined to comment on the Apollo portfolio, but said that the European investment market in the widest sense is now ‘all about where you see rental growth – and logistics is front and centre of that’.

He added: ‘In Europe, logistics has never been the poster child for rental growth but that is about to change. Rental growth here has been running on average at 1%-3% and we expect it to follow Canada and the US where we are seeing 10% rental growth a year.’

Yields of 4.5% have already been set this year on completed sales of logistics portfolios, including Prologis’s acquisitions of both ‘Ostium’ in the Nordics and Colonial’s Spanish ‘Magna’ portfolio.

This article first appeared in EuroProperty, PropertyEU's weekly publication

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