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Tristan Capital Partners has appointed Eastdil Secured and JLL to sell a portfolio of logistics properties across France, according to CoStar News. The portfolio, dubbed Project Reverso, comprises 28 assets, generating €18.7m in annual rental income. Built up by Tristan through sale & leaseback transactions, the portfolio is located along France's main logistics corridors, from Rouen to Paris and Lyon, as well as Nîmes and Marseille. The weighted average term of the leases to expiry is 6.2 years.
This is just one of the many portfolios for sale in a market that has been in a frenzy in recent weeks. In early April, for example, Ares Management, accompanied by Factor'Industry Real Estate, signed the Montclair portfolio with Blackstone for €325m, representing a yield of 5.5% (see our article); a package of nine assets that attracted a lot of attention, leading Ares Management to pay 8% more than the initial guide price, according to CoStar News.
The Corbas trigger
In March, Prologis acquired a 77,000 m² platform in Corbas from BNP Paribas REIM for around €120 million, representing a yield of less than 5% - information revealed by Business Immo (read our article). The asset had attracted 24 bidders, resulting in a yield compression of 25 bp. This is "the deal that's going to open up the 2024 market", we were assured at the time by a logistics player familiar with the matter. This has since been confirmed by Louis d'Arexy, co-founder of Factor'Industry Real Estate, which has just restructured its asset management business (see our article). "There was a before and an after to Corbas. It gave the market a new lease of life, after 18 months of very little activity".
And he adds: "Today, the asset class is doing very well, with an influx of capital. The Anglo-Saxon funds we work with anticipate and want to take advantage of the compression in interest rates, so they see this as an opportune time to invest. The market always corrects very quickly, in one direction or another"
Dry powder accumulation
Since then, XXL signatures have been multiplying. The recent sale & leaseback leaseback by PGIM Real Estate in Mitry-Mory, involving a 77,000 m² logistics platform occupied by the Fnac Darty group (see our article), as well as the acquisition by Clarion Partners of a 61,769 m² category A logistics asset developed by Goodman in Sury-le-Comtal (see our article), not forgetting the purchase by Ares Management, again accompanied by Fire, of a 75,000 m² logistics platform in Mer (41), from DWS, on the basis of a 5.5% AEM yield (read our article).
According to Cushman & Wakefield's projections, the volume of investment in the logistics market should exceed €2 billion by 2024, and even approach €3 billion. According to Nicolas Chomette, associate investment consultant at Arthur Loyd Logistique, "after the significant downturn in the market in 2023, logistics real estate will undoubtedly benefit from the return of investors in 2024. The prospect of a cut in ECB key rates, improved financing conditions and the accumulation of "dry powder" ready to be deployed in certain industrial real estate segments have, in fact, enabled this market to regain some color. Not to mention the fact that some people see logistics as an asset for the future, forecasting rental growth in the years ahead" (see our article).