Singapore's FCL enters last-mile logistic sector in €257m ECE deal

Frasers Property Investments Europe, part of Singapore-incorporated Frasers Centrepoint (FCL), has made another significant move in expanding its footprint in Europe's logistical and light industrial segment by buying six logistics assets in Germany from the Hamburg-based ECE Projektmanagement.

The purchase is the entry into the German last-mile logistic sector, Fraser writes in a release. The price of €257m is about 4 % above the market value of the assets assessed in October 2017.

"After acquiring a 99.4% stake in Dutch listed firm Geneba Properties in July 2017 this is a further proof of Frasers' plan to grow its market share in the European logistical and light industrial segment significantly," said Wulf Meinel, CEO at Frasers Property Investments Europe.

The six cross-dock facilities are located in core logistics markets in Heilbronn, Mainz, Berlin, Augsburg, Hamburg and Halle, and have a total lettable area of 75,378 sqm on a total land surface of 426,439 sqm. "Dock-doors have been provided on all four sides of the facilities in each of the properties, which allows a flexible stream of goods within the buildings," FCL said in a release.

"The demand for high-quality logistics properties continues to be very high both in Germany and internationally. We are delighted to work with Frasers Property Investments Europe in the context of this transaction for the first time," commented Henrie Kötter, ECE's chief investment officer.

The properties in Heilbronn, Mainz and near Berlin are newly constructed, while the Augsburg property is expected to be completed in February 2018 and the Hamburg and Halle properties in Q4-2018 and Q1-2019 respectively.

All properties have a long-term lease to Hermes, Germany's largest private B2C parcel delivery company, and have a 100% occupancy rate. They are part of a total of nine logistics centres that ECE is developing for Hermes.

FCL highlighted the benefits of the acquisition which will include enabling FCL to grow its proportion of recurring income while complementing its current portfolio of European logistics and light industrial properties. The purchase also positions FCL to benefit from e-commerce logistical requirements. "The last-mile logistics sector has demonstrated resilience, with rental and occupancy rates on an uptrend due to strong demand and limited supply." It added, The acquisition also offers "strong defensive characteristics".

The properties will be financed with a loan from German property lender Deutsche Pfandbriefbank AG (pbb) and FPE equity/shareholder loans.

FPE was advised by JLL (valuation), REAG (technical) and Clifford Chance (legal) while ECE was advised by BNP Paribas Real Estate and truon Rechtsanwälte.