European investment manager Mark has secured an initial €250 mln debt facility from investment bank Citi to fund the first wave of acquisitions for its new investment fund.
Crossbay II, the second fund of Mark’s urban logistics platform Crossbay, is targeting a €2 bn gross asset value portfolio, focusing on existing single-tenant last-mile facilities in urban infill locations near Europe’s core cities, where rental growth should be the strongest.
The financing will enable Crossbay to enter new markets such as the UK, Sweden and Denmark, expanding reach beyond the existing core markets of France, Germany, Spain, Italy and the Benelux region.
Crossbay II will have a greater focus on asset management and leasing initiatives and will develop high quality assets in prime locations marked by severe undersupply, with a strong emphasis on sustainability.
Marco Riva, CEO of Crossbay and head of logistics at MARK, said: ‘The second Crossbay vehicle will build on the success of the first by leveraging our teams on the ground to execute more value-add and leasing initiatives to drive value and capture rental growth, and increasing development activity where appropriate, with all new developments built to meet our strict ESG requirements. The new facility provided by Citi, enabled by the strong relationship we established through the first Crossbay vehicle, will reinforce Crossbay’s market reputation for speed and certainty of execution. We have a solid pipeline of opportunity, but will deploy capital selectively, focusing exclusively on attractively priced assets at very healthy premiums to prime yields that we are able to access off-market through our embedded local teams.’
Marcus Meijer, CEO at Mark, added: ‘Urban logistics remains an attractive investment opportunity thanks to compelling demand/supply dynamics and clear long-term growth drivers, from the shift away from physical retail to online shopping to the reordering of supply chains in the wake of Covid-19 and recent geopolitical events. In many European markets, e-commerce penetration continues to lag behind the US, and we expect online sales to rise as a proportion of overall retail spending, while the predominance of inflation-linked leases in Europe means we are well positioned to weather the current higher inflationary environment. The urban logistics sector’s strong underlying fundamentals combined with the price dislocation we are seeing presents a unique buying opportunity, while ultra-low vacancy rates provide clear room for rental growth.’
The establishment of the new fund follows the September sale of the first Crossbay portfolio to warehouse owner and operator Prologis for around €1.6 bn, Europe’s largest warehouse deal this year. Citi provided €400 mln in debt financing for the first Crossbay vehicle.