UK’s Hansteen buys high-yielding German logistics portfolio

The London-listed UK and European property investment group Hansteen Holdings recently paid €26m to buy a portfolio of six logistics properties from the Australian group Dexus Funds Management Ltd. The purchase was funded from Hansten’s existing cash resources and reflects an initial yield of 13.77%.

According to Hansteen, the properties, which are located in the established logistics centres of Langenweddingen, Friedewald, Knetzgau, Unna and Langenfeld (two), are all good quality distribution warehouses suited to modern occupational requirements, all with excellent motorway connections and total 127,000 m² of built space.

The price represents a capital value per square foot of just £15.25 (approx. €18.9), considerably less than 50% of replacement costs. The portfolio is 95% occupied with a current rent roll of €3.58 million, representing a low average rent of €2.90 per m².

Ian Watson, Hansteen’s joint CEO, commented, “This is a slightly unusual transaction for Hansteen given the high occupancy and the possibility that one or two of the tenants will vacate over the next year or two. However, we believe the portfolio represents fundamentally great value on a vacant possession basis…The fact that in addition it combines a high running yield, off low rents, with potential to add value through asset management initiatives and development opportunities made it irresistible.”