Acquisition of Two Highly Sustainable Logistics Assets in Prime Locations in Germany For €290.0m

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Key factssvh-handels-wmgroup-distribution-facility-bochum-germany

Location: Bochum, Düsseldorf, Germany
Investment pillar: Foundation Asset
Acquisition price: €35.7 million
Net initial yield: 4.9% on the corporate acquisition
GIA: 37,037 sqm
Eaves height: 12 metres
Lease expiry: unexpired lease term of 5 years
Acquisition date: November 2018svh-handels-wmgroup-distribution-facility-bochum-germany

Further information

  • This new, well-specified, purpose-built asset is strategically located in an established logistics location near Bochum, in the Rhine-Ruhr region of Germany. The area benefits from excellent logistics links including strong railway and road connectivity with direct access to the A40 and A43 motorways. It also continues to see high occupier demand, a low vacancy rate and limited availability both of logistics buildings and land for development.
  • Upon acquisition this investment is fully income producing and offers attractive scope for value and income enhancing opportunities.
  • One unit is leased to SVH Handels GmbH (“SVH Handels”) for a fixed term of seven years, with 6.4 years unexpired. SVH Handels is a subsidiary of the Würth Group, a worldwide wholesaler of 125,000 products for the trade and craft industry, with annual turnover of over €12 billion.
  • A second unit is leased to WM Group GmbH (“WM Group”) for a fixed term of five years, with 4.6 years unexpired. WM Group, a logistics service provider, is part of LB GmbH, which employs over 800 people across nine locations in Germany, Austria and the UK.
  • The remaining vacant space, with a combined gross internal area of 17,664 sqm, benefits from a five-year rental guarantee to the Company provided by Dietz AG (“Dietz”), the Company’s asset manager in Germany.

Asset management initiatives

Following the completion of this new letting, this well-specified property is now fully let.

  • On 20 March 2019 within three months of acquisition the Company announced the letting of the first vacant unit of 9,337 sqm to Gruber Logistics GmbH (“Gruber Logistics”), is an established transportation and logistics service provider in the German market and is a subsidiary of Gruber Logistics SpA. The lease has been agreed for a five-year term commencing on 1 April 2019. The initial rent is in line with the level of the rental guarantee from Dietz AG and is subject to annual CPI uplifts reflecting 100% of the German Consumer Price Index with a hurdle of 2%.
  • In January 2020 the Company announced the letting of the second 8,335 sqm vacant unit to Recht Logistik GmbH (“Recht Logistik”), an established German logistics and transportation company. This new lease has been agreed for a five-year term from 1 February 2020 at a headline rent which is higher than both the previous rental guarantee and current passing rent at the neighbouring units. This demonstrates the quality of both the asset and location, as well as the reversionary potential of the remainder of the building. The new rent will be subject to full annual indexation reflecting 100% of the German Consumer Price Index.

For related information see Our Properties and Portfolio Summary