Listed German property company DIC Asset has wasted little time since its recent takeover of RLI Investors in launching a special logistics property fund with its newly-acquired subsidiary.
The open-ended special AIF, RLI-GEG Logistics & Light Industrial III, with a risk profile of “Core/Core-plus”, is aiming for a total investment volume of €400 million and is planning for the fund to mature in 10 to 12 years. The targeted annual distribution is 4.5% to 5%.
In addition to classic profitable logistics real estate, the fund will invest in light industrial and urban logistics property in Germany, Benelux and Austria, which will mark DIC Asset’s first investments abroad.
According to Sonja Wärntges, CEO of DIC Asset, “We are demonstrating here how exceptionally well the competencies of RLI Investors complement our management platform. The fact that we went to the market with this product within just a few weeks of integrating RLI Investors makes it clear what we mean by ‘dynamic performance’.
The fund, which will be administered by Hansainvest, is aimed at professional institutional investors wishing to diversify their portfolios with investment opportunities that exceed current low interest rates. The fund has been already been seeded with four logistics assets in Germany with a combined value of about €132 million. “We have reacted quickly, collaborated creatively, leveraged our networks in the market and now offer institutional investors a seed portfolio of the highest quality”, said Wärntges.The Spezialfonds expects to reach its target volume within three years. Its acquisition target per asset ranges from €15m to €75m, to complement the assets already seeded. Other properties – including standing properties and new-build units, and portfolios as well as property developments with high alternative use potential – are already in due diligence.
Just before year-end, DIC Asset bought the Munich-headquartered RLI Investors, along with a minority stake of 25% of Realogis Holding GmbH, from Schweizer Capital Holding, a vehicle owned by ‘impact’ investor Umut Ertan, who founded both Realogis (in 2005) and RLI in 2013.
It followed DIC Asset’s new strategy to expand its involvement with the logistics asset class, and saw DIC Asset’s AUM increase by about €700m, as well as taking over the investor base of RLI. DIC Asset’s logistics holdings prior to the takeover amounted to only about €50m, so the company is moving swiftly to deliver on its announcement last summer to boost its logistics holdings.
In a recent media interview, Wärntges talked about the firm’s new commitment to logistics. “The growth potential in the sector is very attractive. In addition, there are significant structural changes in this market, which are also providing impetus. In Germany, Europe's largest logistics market, and also abroad, this market promises to be highly dynamic. Accelerated by the Covid 19 pandemic, we will see increased growth in the future as supply chains in Europe and globally reorganize.
“One reason is increased demand for buffer stocks, particularly for security of supply of everyday goods. Another is the booming electronic mail order business, which is putting even more focus on supplying population centers with goods from the Internet and creating increasing demand for logistics space.
“The logistics market is only just picking up momentum and we expect it to continue. The requirements and challenges will also change here. In this respect, this is a good time and a very good opportunity for both RLI Investors and DIC to combine strengths and shape the future.
