Investment manager Mark has obtained a €250m (£218m) debt facility from Citi to fund the first acquisitions for the second fund of its urban logistics platform Crossbay.
Crossbay II seeks to expand to new territories including the UK, Sweden and Denmark. It is seeking to amass a €2bn portfolio of assets under management.
The vehicle will buy existing single-user, last-mile facilities in major European gateway cities, focusing on urban infill locations with strong rental growth forecasts. It will also acquire development opportunities.
The new fund comes after the first vehicle was sold to Prologis in September for around €1.6bn, reflecting a circa 4.25% exit yield. Citi previously provided €400m in debt financing for the first fund.
Marcus Meijer, chief executive of Mark, said: “Urban logistics remains an attractive investment opportunity thanks to compelling demand/supply dynamics and clear long-term growth drivers, from the shift away from physical retail to online shopping to the reordering of supply chains in the wake of Covid-19 and recent geopolitical events.
“In many European markets, e-commerce penetration continues to lag behind the US, and we expect online sales to rise as a proportion of overall retail spending, while the predominance of inflation-linked leases in Europe means we are well positioned to weather the current higher inflationary environment.”
Meijer added: “The urban logistics sector’s strong underlying fundamentals combined with the price dislocation we are seeing presents a unique buying opportunity, while ultra-low vacancy rates provide clear room for rental growth. Rents make up a tiny fraction of corporate occupiers’ supply chain costs compared with transportation. In an environment of high energy and fuel costs, this will increasingly incentivise occupiers to invest in well-located logistics assets close to population centres.
“Crossbay forms a key part of our multi-platform strategy, and the platform’s unique structure and genuine pan-European network means we are well positioned to take advantage of repricing to quickly and competitively amass another institutional-grade portfolio of scale.”
Marco Riva, chief executive of Crossbay and head of logistics at Mark, said: “Having acquired our first last-mile assets in 2018, Crossbay benefited enormously from an early-mover advantage, which enabled us to create a market-leading pure-play urban logistics portfolio that attracted the attention of the world’s largest logistics owner and operator.
“To this day, Crossbay is still Europe’s only truly pan-European pure-play logistics platform, and there are huge advantages that come with this.
“The second Crossbay vehicle will build on the success of the first by leveraging our teams on the ground to execute more value-add and leasing initiatives to drive value and capture rental growth, and increasing development activity where appropriate, with all new developments built to meet our strict ESG requirements.”
Riva added: “We have a solid pipeline of opportunity but will deploy capital selectively, focusing exclusively on attractively priced assets at very healthy premiums to prime yields that we are able to access off-market through our embedded local teams.”
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