Information on the Target

Crossbay has successfully acquired a fully-leased €60 million portfolio comprising nine prime properties located across France. This acquisition represents a significant step in expanding Crossbay's presence in the highly competitive last-mile logistics sector. The properties are strategically situated within key urban areas, including major French cities such as Paris, Lyon, Nantes, and Orleans. Covering a total area of 50,000 square meters, this portfolio is set to enhance the company's operational efficiency and service delivery capabilities in metropolitan regions.

Industry Overview in France

The last-mile logistics sector in France has been on an upward trajectory, particularly accelerated by the COVID-19 pandemic. With a surge in online shopping driven by lockdowns, the demand for reliable and efficient last-mile delivery solutions has never been greater. As consumers gravitate towards e-commerce, logistics companies are driven to enhance their operational infrastructure to meet rising expectations for faster delivery times.

According to recent reports, online sales in France are projected to exceed €345 billion by 2023, positioning the country as a leader in the European e-commerce market. The growth in online transactions is underpinned by evolving consumer behavior, where convenience and accessibility are paramount. This transformation has heightened the need for optimized distribution networks focusing on urban delivery capabilities.

Furthermore, the shift towards online shopping has led to a significant demand for last-mile logistics providers to develop single-user distribution centers. These facilities are designed to streamline processes, reduce delivery times, and cater to the unique requirements of e-commerce businesses. Crossbay's strategic focus on these types of assets aligns perfectly with emerging market trends.

Additionally, it is anticipated that Western Europe's overall online sales will account for approximately 15.6% of total retail sales by 2023, up from 9.7% in 2019, marking a substantial opportunity for growth within the last-mile segment in France and neighboring markets.

The Rationale Behind the Deal

The strategic acquisition of these properties reflects Crossbay's commitment to expanding its market presence in France, which remains a crucial target for growth. By focusing on prime last-mile logistics sites, Crossbay is well-positioned to capitalize on the increasing demand for urban distribution solutions.

This off-market transaction underscores the strength of Crossbay's operational team which has demonstrated agility and foresight even amidst challenging market conditions presented by the pandemic. The acquisition also aligns with Crossbay's broader strategy of building a €500 million portfolio in France within the next two years.

Information about the Investor

Crossbay was launched in May 2020 by MARK, a leading private equity real estate investment manager. The firm aims to facilitate institutional investors, such as pension funds and insurance companies, to diversify their portfolios within the growing last-mile logistics sector. The recent capital raise demonstrates strong backing and confidence from a diverse set of global investors, including the Townsend Group, CBRE GI, Credit Suisse, Nuveen, and QInvest LLC.

In addition to securing €550 million in equity commitments, Crossbay has recently obtained a €400 million debt facility from Citi, an investment bank, to further support its expansion plans. This strong financial position, combined with a dedicated local team in France, empowers Crossbay to pursue additional investment opportunities in the logistics landscape.

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Crossbay's acquisition of this €60 million last-mile logistics portfolio appears to be a strategically sound investment, aligning with growing trends in online retail and consumer demands for fast delivery. The decision to focus on single-user distribution centers not only reduces operational complexities but also minimizes exposure to economic fluctuations, thus enhancing risk management.

The current market conditions, characterized by robust growth in online shopping, create an imperative for logistics operators to adapt and invest in infrastructure that meets modern demands. Crossbay’s targeted investments in prime locations position it advantageously for capitalizing on this growth.

Furthermore, the successful recruitment of a strong team with real estate expertise, exemplified by the hiring of Augustin Olivier, strengthens Crossbay's capability to effectively manage and expand its portfolio. This is crucial for fostering ongoing operational success and profitability in the logistics sector.

In summary, the acquisition not only enhances Crossbay's footprint in a key European market but also demonstrates a proactive approach to capturing emerging opportunities within the last-mile logistics space, potentially yielding considerable returns for investors in the long run.

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