CBRE Investment Management has launched a perpetual, core+ pan-European logistics fund with an ambition to grow it to €5 bn.
Called ELP (Europe Logistics Partners), the new vehicle was created in response to demand from CBRE IM's investors including those in the manager’s last Europe Value Partners (EVP 2) fund - which had a strong emphasis on build-to-sell logistics and reached the end of its investment period in 2020.
EVP’s largest sale in May 2021 was the Montepino portfolio in and around Madrid and in Zaragoza. The original portfolio of 14 logistics developments was secured for circa €300 mln in 2017 and subsequently added to.
The final portfolio of 22 properties totalling 865,000 m2 - all LEED certified - sold to Bankinter Investment for circa €1.1 bn.
The new ELP fund is already €2.7 bn in size with 58 properties in nine countries including France, Benelux, Italy and the Nordics. It has been created by combining CBRE IM’s European Industrial Fund and its Logistics Venture Fund. Morgan Stanley advised on the fund’s creation.
Unlike the closed-end EVP strategy, the assets built will usually be held by the investors. It will have ‘a dynamic core+’ profile and aims to achieve a net return of 7%-9% pa, subject to market conditions.
The Luxembourg-domiciled vehicle will be managed by Christina Forrest, head of EMEA direct logistics strategies.
Forrest said: ‘’By combining these complementary portfolios, an enhanced platform has been created with immediate scale, enhanced diversification and high growth potential, while benefiting from significant efficiencies to the advantage from investors and building users.
The US fund management giant has €13.8 bn of logistics properties under management in Europe consisting of 420 buildings, 625 tenants and 8.4 million m2 in 12 countries (Q1 2022).
CBRE IM has not revealed whether it will continue with the closed ended EVP series. It is thought that the firm considers it is difficult to achieve the kind of returns which its investors in its sister Asia and US value add funds expect, in Europe.