Singapore’s Elite Partners Capital Buys German Logistics Park From TPG AG JV

Singapore-based fund manager Elite Partners Capital has acquired a logistics park near Germany’s automotive capital of Stuttgart for an undisclosed price.

The park spans 180,000 square metres (1.9 million square feet) and benefits from its location close to the famed hometown of luxury car makers Mercedes-Benz and Porsche, Elite said Thursday in a release. The seller was a joint venture of US alternative investment manager TPG Angelo Gordon and its local partner.

Elite made the acquisition on behalf of its flagship Elite Logistics Fund II after divesting the first instalment of the fund series to Blackstone in 2021. The stabilising interest rate picture provides a window of opportunity for Elite’s investors to re-enter the market, said co-founder and CEO Victor Song.

“We have been closely monitoring the logistics market across pan-European cities, targeting quality assets with strong tenant covenants and compelling value-add opportunities,” Song said.

Car Giant’s Sheds

Over 85 percent of the park’s net lettable area is tenanted to an automotive giant on a long lease, serving as the group’s global logistics centre, according to Elite. The remaining space is occupied by a mix of engineering businesses.

The Singaporean firm plans to work with the anchor tenant to boost the property’s ESG specifications in the coming years with a view to attaining a DGNB Gold certification.

Blackstone acquired the Elite Logistics Fund I portfolio three years ago for €520 million (then $586 million). The set of properties had been assembled by Elite and Australia’s Macquarie Capital Principal Finance through nine transactions under the vehicle, which closed on €150 million in commitments in 2020 and sought to tap investment opportunities in the UK and the EU as e-commerce boomed.

The Fund I disposal represented an internal rate of return of more than 30 percent, said Elite, which has managed assets in excess of S$2 billion ($1.5 billion) across seven countries. Acquisitions under Fund II have included warehouses in the central Netherlands and in Wales.

Euro Leasing Slowdown

Tenants took up more than 5.2 million square metres of logistics space across Europe in the first quarter of 2024, down 19 percent year-on-year, according to a JLL report.

Despite a continued slowdown in leasing activity, first-quarter take-up was 5 percent above the 2014-19 average, the consultancy said. Supply constraints, longer negotiation periods and cost-conscious end customers slowed the flow of leasing deals, as the European weighted average vacancy rate rose for a fifth straight quarter to 4.5 percent.

Over €6.6 billion ($7 billion) was invested in European industrial assets during the first three months of the year, the report said, as activity returned to pre-pandemic levels and large deals re-emerged, including portfolio sales.