South Korean Investors Take Aim at Amazon in €200M Euro Shed Buy

South Korean institutional investors have funded a €200 million ($216 million) acquisition of a German logistics portfolio which includes a large-scale Amazon fulfilment centre, as the European warehouse sector continues to attract Asian capital.

London-headquartered investment management firm Apeiron Capital said that it had teamed up with Seoul-based Midas International Asset Management to acquire the “Maple portfolio” on behalf of undisclosed investors.

Canadian retirement fund manager Healthcare of Ontario Pension Plan (HOOPP), sold the 150,000 square metre (1.6 million square foot) trio of assets to the Korean venture, according to JLL, which advised HOOPP on the transaction. The North American pension investor had developed the portfolio through its €1 billion development partnership with London-based logistics developer Verdion.

Buying Euro Mega-Sheds

“The Maple portfolio is a unique collection of high-quality assets let to some of the world’s leading companies,” said Apeiron’s CEO and founder, Vojkan Brankovic, who added that the buildings are “well-located in established logistics hubs and have a high technical specification”.

The weighted average lease term for the assets is close to 14 years, according to Apeiron.

The assets are located in the Saxony city of Chemnitz, Werne in Rhine-Wetphalia and Alzenau in Bavaria, and are leased to e-commerce giant Amazon, engineering and electronics conglomerate Siemens and US advanced materials manufacturer Materion Corporation.

The largest of the three properties is a 100,000 square metre fulfilment centre in Werne which is leased to Amazon and employs around 1,700 of the e-commerce giant’s workforce.

The three year old facility is 22 kilometres (14 miles) north of Dortmund Airport and has access to motorways connecting it with the country’s key north-south and east-west routes.

The Chemnitz asset is a LEED silver certified, 34,000 square metre facility leased to Siemens on a ten-year lease which started when the property was completed in 2014. The Alzenau property, which is located 34 kilometres east of Frankfurt, is a 12,700 square metre warehouse and light production facility leased to Materion Corporation.

European Warehouses in Fashion

The acquisition fits into a trend of Asian players pursuing the potential returns to be derived from the e-commerce-fuelled growth of European logistics real estate.

Just last month, Seoul-based Vestas Investment Management acquired a distribution centre in central Poland on behalf of Korean institutional investors for €71 million, in a deal which came just over two weeks before GLP announced that it was spending €1 billion to acquire Goodman Group’s five million square metre central and eastern European logistics portfolio.

In an end of the year mega-deal in December, Singaporean sovereign wealth fund GIC purchased bought a one million square metre collection of 28 European distribution facilities from Apollo Global Management for €950 million.

Targeting the Old Continent

Before the impact of the COVID-19 pandemic had been fully felt in Europe, the continent recorded a quarterly record €84.8 billion in commercial real estate investments from January through the end of March — a 51 percent increase from the previous quarter.

During that same period Industrial and logistics investment rose 17 percent to reach €9.5 billion by the end of March, according to a report by CBRE, which predicted that the effect of the novel coronavirus would be reflected in results for the second quarter.

Despite this delayed impact on investment, the authors of the report noted that the “strong performance in the first quarter of 2020 is indicative of the amount of capital available to invest into European real estate and gives confidence investment volumes will regain strength once COVID-19 uncertainty fades”.