EUROPROPERTY: €350m portfolio sale could push German yields to 4.5%

Alpha assets on market as investor demand in sector remains strong.

A €350 mln big box logistics portfolio on the market in Germany could push prime yields down to 4.5% in the sector. On behalf of a Middle Eastern investor, CBRE has taken first round bids for the Alpha portfolio, which comprises three large warehouses totalling 340,000 m2 with a weighted average unexpired lease term of nine years. The vendor is believed to be hoping to achieve about €350 mln for the buildings, which produce annual rent of almost €17 mln and are let to: BMW in Munich; Daimler in Offenbach; and the Otto Group in Loehne. Investor demand for German warehouse and logistics assets remains strong, with prime yields compressing last year by 75 basis points, from 5.4% to 4.65%, according to Colliers International. Other investors set to benefit from the strong prices include Hines, which is selling the Gemini portfolio on behalf of its Global REIT. JLL is advising on the sale which includes five big box German logistics facilities and four in Poland and is expected to fetch over €400 mln. The WAULT on the German Gemini assets is above eight years, but some of the properties are on shorter leases. The Hines Global REIT board this week approved a plan to liquidate the vehicle, which had 45 properties in Germany, the US, UK, France, Poland, Russia and Australia and has already sold 12 assets. In a third live sale, Prologis, advised by JLL, has a buyer lined up for the €100 mln-plus Sapphire portfolio comprising five German warehouses. Meanwhile, EuroProperty reported last month that BEOS is looking for circa €500 mln for a 950,000 m2 industrial portfolio of more than 20 properties spread across Germany. Colliers is advising on the deal, which is known as Optimus Prime. The agent says the logistics market was the second strongest behind offices in Germany in Q1 2018, with €1.8 bn, or 16% of the overall €10 bn transacted. The two largest logistics sales in Q1 were Frasers’ purchase of an Alpha Industrial company for over €600 mln and Goodman’s sale of the 240,000 m2 Azurite portfolio for c€250 mln, which Blackstone is due to complete on in the next few weeks.


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