Blackstone the buyer of €500m Immofinanz logistics portfolio

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We reported in these pages at the end of August that listed Austrian property group Immofinanz AG had announced that it planned to exit the logistics sector to concentrate on its office and retail investments, along with a renewed focus on its key markets, including Germany, Austria and Poland, while reducing its exposure to Russia.

This week Immofinanz confirmed that it has sold its 1 million sqm logistics portfolio to Logicor, the European logistics arm of giant private equity group Blackstone. The deal is expected to officially close in next year's first quarter.

Logistics make up about 8% of Immofinanz's total assets. The company had said that its principal competitors are all nearly ten times as big, and it can no longer compete to be a market leader in its core markets. Its logistics division is made up of 36 standing investments, with 24 of the assets located in Germany, as well as a development project in Hamburg. The ramining assets are in Hungary (5), Romania (3), Poland (2), Slovakia (1) and Russia (1).

The assets are valued at €536m, less about €28m construction costs for the development projects (ther are a further two in Romania), which is likely to reflect the price paid by Logicor.

According to Immofinanz CEO Oliver Schumy, "The sale of the logistics portfolio represents an important step to further simplify and optimise our portfolio structure and strengthen the focus on our core expertise in the retail and office segments." The proceeds are to be re-invested in expanding Immofinanz's German portfolio, which is now targeting growth to nearly 200,000 sqm of rentable space over the next three years.

Immofinanz spun off its residential property business BUWOG two years ago, which holds about 52,000 residential apartments spread almost equally between Germany and Austria, and plans to sell off its reamining minority holding this business year.

Logicor is at the forefront of large-scale logistics investment in Europe as the sector continues to consolidate. It recently bought a majority stake in the Finnish group Certeum, which owns and manages about €900m of logistics and industrial real estate throughout Finland. Another making a big investment was CBRE Global Investment Partners, which paid TH Real Estate about €350m for seven assets with 600,000 sqm across Germany, France, the Netherlands and Spain.

Here in Germany Logicor has also been an active buyer, with purchase this year alone including ten Tengelmann warehouses with 425,000 sqm, and a portfolio of 19 assets from Goodman with 479,000 sqm of logistic space in Germany and France. With the latest acquisition from Immofinanz, Logicor now has 1.8m sqm of logistics space under management.