LIP Invest launches third logistics fund, closes on €100m centre

Munich-based logistic investor LIP Invest is launching its third logistics real estate fund. Like its predecessors, the open-ended real estate special AIF "LIP Real Estate Investment Fund - Logistics Germany III" (LIP Logistik III) will invest exclusively in logistics real estate in Germany in the Core+ risk class. The fund is targeting raising €320m of capital, from both new and existing investors.

According to Bodo Hollung, partner and managing director of LIP Invest, “Logistics real estate is proving to be an anchor in the crisis for many investors. The trend towards a reversal of globalisation, which began a number of years ago, is likely to be further accelerated by the Corona crisis.”

“In particular, sectors such as the automotive and pharmaceutical industries will have a greater need for storage space closer to production sites as a result of the expected partial relocation of supply chains. In addition, it can be assumed that the already high growth in online shopping will increase more quickly as a result of changes in purchasing habits, which are now accompanied by a high demand for space.”

Logistics Germany III, which is now open to institutional investors for subscription, is in the due diligence stage for its first deal in Bavaria. As was the case with the first two funds, LIP said it could draw on a real estate pipeline with a current value of €400m due to its good market access, allowing for a quick release of capital.

The first fund in the series Logistics Germany I, launched in 2018, completed its final closing at the end of 2019 with €190m in equity, following additional investments from existing investors. It made 14 property purchases and invested about €340m, before making its final deal in Fürth in April of this year.

The second fund, Logistics Germany II, launched in 2019 and closed with equity of about €260m. Including pipeline acquisitions, this fund has already invested €425m, and has just closed on a mega-logistics centre in the Bavarian town of Obernburg in an off-market deal for €100m, in one of the three biggest logistics transactions this year in Germany.

Obernburg lies just south of Aschaffenburg, on the Bavarian border close to Frankfurt am Main, and 40 minutes from Frankfurt Airport.

The property was developed and sold by Mainsite Logistik Nord, which will also rent three sections of the warehouse, around 30,000 sqm, for its own logistics purposes. In total, the complex provides around 70,500 sqm of warehouse space and a mezzanine level of around 6,500 sqm of office accommodation. Other tenants include the companies syncreon and Geis Global Logistics. A warehouse section of 10,000 sqm and a 2,400 sqm warehouse are still available for rent.

The Obernburg deal brings the total invested by LIP funds in logistics property to €800m since 2018.