LIP Invest, a leading provider of specialist logistics property funds in Germany, is continuing the investment phase of its current fund with further property acquisitions and several subscriptions from institutional investors.
Since the start of the investment phase last autumn, LIP has already invested more than 150 million euros in German logistics property. This means that around half of the targeted investment volume of approximately 350 million euros has been realised. The portfolio built up to date will generate an average distribution yield of more than 5.25 per cent over the planned ten-year term and comprises properties with long-term, index-linked leases. The “LIP Real Estate Investment Fund – LOGISTICS GERMANY V” is managed by IntReal Kapitalverwaltungsgesellschaft.
Further capital commitments and a flexible financing strategy
The fund currently has eleven equity subscriptions from institutional investors, including savings banks, banks and foundations. The next closing is imminent. David Zimmermann, Managing Director of LIP Invest, comments:
“The willingness of long-term-oriented German investors to invest has increased noticeably in recent months. In view of the rise in interest rates, we have recently reduced our use of debt capital. At the same time, this creates a flexible starting point that will enable us, if necessary, to raise finance at a later date when interest rates are lower and to capitalise on opportunities in a targeted manner. Interested investors still have the opportunity to invest in the fund.”
The fund pursues a core strategy focusing on new-build logistics properties suitable for third-party use. The emphasis is on modern properties in logistics-oriented locations with long-term demand for space, which are expected to offer potential for sustained rental growth and value appreciation.
“We are delighted with the confidence shown by our existing investors and the new capital commitments, which will enable us to proceed with further acquisitions from our property pipeline. We are planning for a distribution yield of over 5.30 per cent – despite a lower debt ratio of around 40 per cent. The current market environment offers the opportunity to acquire high-quality properties with potential for future value appreciation, and we intend to capitalise on this opportunity,” explains Sebastian Betz, managing partner of LIP Invest.
The entire LIP portfolio is fully let
Demand for modern logistics space in Germany remains high, whilst new construction activity – particularly in the case of speculative property developments – remains low. This contrasting trend is likely to lead to a significant supply shortfall in the foreseeable future and result in further rises in rents in some logistics regions.
“Over the past few months, demand for space has risen significantly once again. Among other things, the regulations adopted by the EU to combat duty-free low-cost parcels are having an effect, with the result that Chinese companies are increasingly establishing local logistics structures in Germany. Logistics service providers currently dominate the space market. We can also see the ongoing demand for space reflected in our own portfolio, which is fully let with a total lettable area of 1.4 million square metres,” adds Natalie Weber, authorised signatory and Head of Fund Management at LIP Invest.
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Marketing advertisement. Please read the investment terms and conditions and other contractual documents, the information document in accordance with Section 307(1) and (2) of the German Investment Code (KAGB) (‘Section 307 document’) and the key investor information document for the ‘LIP REAL ESTATE INVESTMENT FUND – LOGISTICS GERMANY V’ (hereinafter referred to as the ‘Fund’) before making a final investment decision. The potential for returns is offset by risks including property, market and liquidity risks.
