Savills Investment Management, the international real estate investment manager, has launched its third European logistics fund (ELF 3), achieving capital commitments of €122 mln from two German institutional investors at first close.
According to Savills IM, the fund has a focus on investments in high-quality distribution centres and cross-docks for third party use in Europe's core liquid logistics markets.
'The fundamentals in Europe’s logistics sector remain buoyant,' said Daniel Hohenthanner, director of investment at Savills IM. 'E-commerce is currently forecast to grow by €220 bn by 2022. This is reflected in continued strong demand for logistics properties and a very low vacancy rate leading to rising rents.'
ELF 2, the fund’s predecessor, was closed to new investors at the beginning of 2019 after raising €560 mln, which was more than twice its target of €250 mln.
According to Savills IM, ELF 2 has delivered a total return of around 7.9% per annum since launch in July 2015 through investments in 22 logistics assets totaling €645 mln in six countries.
'Through ELF 2 we have proven our expertise in deal-sourcing and bringing transactions to a successful conclusion quickly,' Hohenthanner added. 'As a result, a property pipeline for ELF 3 is already built.'
Savills IM has purchased eight assets on behalf of ELF 2 since the beginning of 2019, and a purchase agreement has been signed for a logistics complex under construction in the Nuremberg metropolitan region. Together with other properties that are currently being reviewed for acquisition, the fund will grow to a volume of almost €900 mln.
ELF 3, which has a target investment volume of at least €600 mln and a maximum debt ratio of 50%, aims to deliver an annual income of at least 5% through a core/core-plus strategy.