Swiss Life AM invests in 10 pan-European logistics assets

Swiss Life Asset Managers has further diversified the portfolios of its two funds, ESG European Thematic Income & Growth and ESG European Industrial & Logistics, with the acquisition of 10 logistics assets from Barings.

Financial details were not disclosed.

The properties are distributed across Germany, France, Italy and Spain and represent exposure to a range of property types, including six cold storage units.

The 10 grade-A logistics assets have a combined size of 187,967 m2 and a diverse tenant base, with 55% of the portfolio comprised of cold storage logistics. The weighted average lease term is 8.6 years.

Swiss Life said that the cities within the portfolio are located along strong logistics routes in established locations that have a solid occupier base. ESG European Thematic Income & Growth fund purchased six and ESG European Industrial & Logistics four of the assets respectively.

Cold storage growth
Swiss Life research shows that the cold storage logistics market is set to grow in the coming years.

This segment is underpinned by population growth and increased consumer spending on food, pharmaceuticals and other products that are typically stored in temperature-controlled warehouses between their production and sale in the marketplace.

The sector benefits from high barriers to entry due to high costs and complexity compared to conventional warehousing, as well as incumbents already having the added advantage of economies of scale, long term customer relationships, working knowledge of complex regulatory compliance and bespoke IT operations.

Cold storage facilities serve large 'blue-chip' customers including food producers, distributors and retailers as well as smaller family-owned businesses.

Another key driver in the cold storage market is the growth in the pharmaceutical sector with the pipeline of biologic drugs in development becoming more temperature- sensitive, resulting in an increased requirement to store medicines at frozen temperatures. The market is expected to grow at a CAGR of 18.3%1 until 2026.

Nick Pink, head of Europe real estate portfolio management at Barings, said: 'Having built and benefitted from a significant overweight to the sector for this mandate in recent years, we are now refining our logistics strategy and making selected sales that reflect our view of the sector’s rapid evolution as we emerge from the global pandemic.

'We expect to redeploy proceeds in the sector with a focus on build-to-core and urban logistics in top-tier markets.'

The assets will be managed by Beos, part of Swiss Life Asset Managers since 2018, and a specialist in Germany for industrial and logistics real estate. As at the end of June 2021, Beos managed over €4.7 bn in assets in this investment segment.

Savills advised Swiss Life. 


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