Aberdeen Standard European Logistics buys in Frankfurt hub – Aberdeen Standard European Logistics has exchanged contracts to acquire a new development in a modern logistics hub located in Erlensee Langendiebach, Frankfurt for an expected net value of EUR33.3 million (subject to final rental conditions and full occupancy) from regional developer Ferdinand Fäth. The acquisition will be funded from existing cash, with completion expected in September 2018.
This freehold property development is expected to be completed in September and will consist of two modern multi-let logistic buildings. It is located within the emerging logistics and distribution hub of Erlensee, on the outskirts of Frankfurt in the prosperous Rhine/Main region, the third largest metropolitan region in Germany with 5.8 million inhabitants. The redevelopment of this former US air base is proceeding at pace. The location’s quality has already been recognised by a number of major companies including DS Smith, Dachser Logistics and Wilhelm Brandenburg, the largest meat processing company in the region, with plans for a major facility servicing REWE the German supermarket group. It is expected to become one of the major logistics hubs in the region benefitting from an excellent road infrastructure serviced by the A45 and A66 motorways in the north east of Frankfurt and in the south by the A3 motorway, as well as having direct access to the Frankfurt metropolitan area.
They say that this development fits well with the company’s investment strategy given the modern and flexible specifications of the buildings and the central location. The buildings comprise a total lettable area of approximately 26,395 square metres featuring high quality construction and institutional grade specifications including a total of 50 loading doors. Net initial yield is expected to be in the region of 5.4% reflecting forecast passing rent and full occupancy.
An earn-out agreement means that the company will pay the purchase price, based on the effective letting of the building, after completion of the construction works with a minimum occupancy rate to be delivered by the developer which has already signed lease agreements with two high quality tenants. Full take-up is expected for this prime asset by or around the time of completion.
Evert Castelein, the Company’s Fund Manager, commented: “We are extremely pleased with this premium development opportunity which we expect to close in September 2018. With the support of our local Frankfurt based asset management team we are confident that we can generate a solid and sustainable income stream from an asset located in an area in which we see strong demand for modern, best in class logistics facilities. Our pipeline of investment opportunities remains strong across Europe. A number of further properties are undergoing due diligence or have price agreements in place and announcements will be made at the appropriate time. We remain confident that the deployment of capital is proceeding as planned as we continue to build a well-diversified portfolio of high quality European logistics properties aiming to be fully invested within twelve months of launch.”
ASLI : Aberdeen Standard European Logistics buys in Frankfurt hub