Madison acquires strategic stake in Polish shed portfolio

Private equity real estate investor Madison International Realty has struck its first major logistics deal in Europe, acquiring a strategic stake in the European Logistics Investment platform (ELI), a €500 mln portfolio of Polish real estate assets.

Financial details were not disclosed.

The 46.5% equity stake was acquired from majority owner Redefine Properties, the South-African based REIT. Madison said that the deal reflected its intentions to increase its exposure to the asset class in Europe.

Matthias Cordier, managing director at Madison International Realty, commented: 'This transaction represents a rare opportunity to enter the European logistics market with a significant investment into an existing large scale, high quality portfolio.

'We believe the superior market dynamics in the Polish logistics sector present an attractive entry point compared with other European logistics markets as well as asset classes in Poland.'

The platform, co-managed by the 7% minority co-investor Griffin Real Estate, and logistics developer Panattoni Europe, comprises 14 assets totaling around 560,000 m2. Some 80,000 m2 of this represents nearly-completed space, around 90% pre-let; while an additional development pipeline of 270,000 m2 will kick-off once pre-leases are secured.

The standing assets are around 95% occupied with a blended, weighted average lease term of over four years, and are spread across Poland’s distribution hubs of Warsaw, Lodz, Cracow, Silesia, Pomerania and the Posnania regions. As part of the business plan, the parties aim to further grow the portfolio over the next years to create the leading Polish logistics platform.

As part of the transaction, Madison will provide a €150 mln commitment to ELI, of which €83.7 mln will be used to acquire a 46.5% interest in the existing assets and developments in progress. The remaining €66.3 mln will be used to expand the portfolio in the coming jyears. Redefine will match Madison’s commitment of growth capital.

Madison has been invested in the Polish market since May 2018 when it acquired a 50% interest in the Warsaw Spire office tower from Ghelamco. The tower was sold in July 2019 to Immofinanz for €386 mln. Last year, Madison also bought a controlling stake in Capital Park, a Warsaw-listed real estate investment company with a portfolio comprising 304,000 m2 of leasable space, 77% of which is situated in Warsaw.

'With our new joint venture partner Madison, we are able to fast-track our ambitious target to build ELI into a leading player in the Polish logistic sector, along with our market leading Polish retail platform EPP with a GAV of over €2.2 bn,' said Andrew Konig, CEO of Redefine Properties.


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