Wednesday, March 4, 2020

The Buyer Bought as Major Freight and Logistics Group Sells Off Assets and Leases Back

After Policy of Acquisitions Real Estate Sale Goes Ahead
Shipping News Feature

DENMARK – Savills Investment Management (Savills IM), the international real estate investment manager, has acquired on behalf of Vestas Investment Management (Vestas IM) and their Korean institutional investors the global headquarters and logistics assets of Danish transportation giant, DSV. The assets will be leased back to DSV on long-term commitments.

This is a reversal for DSV which itself has been on an acquisitive mission for sometime, crowned last year when it took over Swiss freight forwarding giant Panalpina. In October DSV announced the scale of redundancies caused by job overlap and one can only assume this deal frees up capital for potentially further expansion.

The latest transaction was comprised of the transfer of three assets, including DSV’s global headquarters office building, originally constructed in 2015 and currently undergoing a 10,500 m2 extension; a cross-dock logistics facility used by DSV’s Road division; and a new warehouse asset completed in December 2019, which will serve clients of DSV’s Solutions business. All of the buildings are located in Hedehusene, approximately 30 kilometres west of Copenhagen.

The acquisition follows on from a two-year stretch in which Savills IM has more than doubled the amount of logistics assets it has under management, rising from €2 billion at the start of 2018 to over €4 billion today. The firm also recently placed sixth in the IPE RE rankings of managers by logistics assets under management.

This latest acquisition brings Vestas IM’s European logistics assets under management to circa €1 billion, of which around €470 million is in partnership with Savills IM. Alistair Ennever, Senior Transaction Manager, Savills Investment Management, commented:

“We are delighted to have acquired these high quality and strategic assets on behalf of Vestas IM and their investors. We have been seeking the right opportunity in the Nordics to leverage our strong local presence and our international fundraising capability, which combined to bring this transaction together. We are very pleased to have concluded another transaction with our partners at Vestas IM and look forwards to doing more together in 2020.

“We have concluded multiple transactions with DSV, and this latest acquisition represents our continued belief in their business and long-term occupation, as well as the logistics sector in general. Pricing and investor demand for logistics shows no sign of weakening, and we remain convinced by the sector’s growth story and strong income fundamentals.”

These convictions were also expressed at the United Kingdom Warehouse Association (UKWA) conference yesterday by Will Laing a logistics analyst at Savills who foresaw a ‘big jump’ in warehouse demand in the UK with Brexit having no significant detrimental effect and, with an annual take up of warehouses over 100,000 square feet up by 14 million square feet in the last decade, this seems a European wide conviction.