Garbe unveils IPO plans for €600m industrial REIT, Logistrial

Germany's Garbe Group has unveiled plans to launch a €600 mln initial public offering (IPO) for a logistics company dubbed Logistrial, with a €768 mln seed portfolio.

The Hamburg-based company said Logistrial's 20 secured assets covered some 619,500 m2 with an approximate annual rental income of €39 mln, let to 52 tenants with an occupancy rate of 99%.

Justus Westerburg has been appointed as CEO.

The REIT, which is expected to be launched on the Frankfurt Stock Exchange by 2020, will hand asset management duties to Garbe's logistics division, Garbe Industrial Real Estate.

It is targeting a raise of between €550 mln and €605 mln in an IPO, of which Garbe Group will contribute around €55 mln.

The firm said it considered 'logistics properties to be a highly sought-after asset class that benefits from a sustained gap in supply and demand driven by strong secular growth trends including the substantial expansion in e-commerce'.

Logistrial figures suggest that the share of e-commerce as a percentage of total retail sales in Europe is expected to increase from 9% in 2017 to 20% in 2025.

According to Garbe, the proceeds from the IPO are to be used primarily to acquire the initial property portfolio. This includes eight new developments, on the whole pre-let.

Logistrial will target a loan-to-value (LTV) of around 45%, and a gross asset value of more than €2 bn in the medium term. It plans an annual dividend yield of around 5% in the medium term.

While the firm will anchor its focus on Germany, it plans to also cover France, the Netherlands, and Austria. The initial portfolio includes 360,899 m2 of German assets, plus 258,650 m2 in the other territories. Overall, it will pursue external growth through acquisitions, and internal growth through development, the firm said.

Family-run Garbe Group has around €4.6 bn assets under management, including industrial assets under management totalling €2.5 bn, and an additional logistics development pipeline of around €1.2 bn.

Deutsche Bank and JP Morgan are acting as joint global coordinators for the IPO and, together with Kempen, as joint bookrunners.

 

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