Target Information

Meyer Bergman, a notable pan-European real estate investment specialist, has acquired a 5,000 sq. m. distribution center located at Preßburger Str. 15, Nuremberg, which is leased to the third-party logistics provider Hermes. This acquisition marks a strategic entry into the German logistics market for Meyer Bergman and supports the operations of its latest venture, Crossbay, which is focused on last-mile logistics in Europe. The vendor for this property, Dietz AG, was advised by the global real estate services firm CBRE.

Industry Overview in Germany

The logistics and industrial real estate market in Germany has been thriving, exemplified by a significant uptick in space utilization. In the first quarter of 2020, CBRE reported a take-up of approximately 1.33 million sq. m. in Germany's industrial and logistics sector, which is notably higher than the averages of the previous five and ten years. This trend continued into the second quarter, culminating in a total take-up of 2.95 million sq. m. for the first half of the year.

Moreover, the online sales market in Germany has witnessed accelerated growth, particularly due to the COVID-19 pandemic, with forecasts indicating an increase in market share from 11.5% in 2019 to 20% by 2030. Such shifts are driving demand for last-mile logistics solutions, which are essential for efficient e-commerce fulfillment and delivering products to customers swiftly.

Nuremberg itself is a critical logistics hub, strategically positioned at a core intersection for rail and road networks connecting significant German cities as well as major eastern European destinations. As Bavaria's second-largest city, Nuremberg boasts a population of 1.35 million, with demographic spending power exceeding the national average by 10%, further illustrating its significance in the logistics landscape.

The ongoing evolution in logistics strategies suggests a robust future for last-mile facilities, as urban conversion to accommodate such logistics operations gains traction within major municipalities. Meyer Bergman’s approach in the sector aligns effectively with this macroeconomic trend.

Rationale Behind the Deal

This acquisition enhances Meyer Bergman’s portfolio by supplementing its investments within the rapidly expanding logistics sector while addressing increasing demand for last-mile distribution centers. The partnership with Crossbay allows Meyer Bergman to concentrate on single-tenant facilities within urban centers—a strategically vital element of modern logistics in Europe. This move follows their recent entry into the German residential market, reflecting a diverse strategy aimed at tapping into resilient asset classes.

The operational model of Crossbay emphasizes the importance of being within a 30-90 minute journey from city centers, ensuring effective distribution capabilities in response to shifting consumer behaviors brought about by the pandemic. The acquisition can be viewed as timely and aligns with long-term trends favoring e-commerce growth and evolving consumer preferences.

Investor Information

Meyer Bergman is a reputable private equity real estate investment manager with established offices across major European cities, including London, Paris, and Frankfurt. The company is recognized for its agile approach to real estate investments, focusing on sectors ripe for growth, particularly in logistics and residential markets. Alongside Crossbay, Meyer Bergman operates several specialized platforms tailored to specific investment strategies.

The logistics platform Crossbay, launched in May, has quickly amassed a total asset pool approaching €500 million. Over its growing portfolio, Crossbay currently maintains a 100% occupancy rate, showcasing its operational effectiveness and the strong demand for its properties. With tenants including major 3PL providers and e-commerce giants, the platform is well-positioned for future performance.

View of Dealert

The acquisition of the Nuremberg distribution center represents a strategic investment for Meyer Bergman through Crossbay. Given the ongoing transformation of consumer habits and the heightened emphasis on last-mile logistics, this venture is positioned to benefit from sustained demand in the logistics sector. The 100% occupancy rate across Crossbay’s portfolio further establishes the viability of their operational model.

Not only does this acquisition signify Meyer Bergman's expansion into a key regional market, but it also underscores its commitment to capitalizing on trends that enhance urban logistics solutions. As e-commerce continues to blossom in Germany and across Europe, assets like this distribution center are anticipated to appreciate in value, contributing positively to overall portfolio performance.

While competition in the last-mile logistics space may intensify, Meyer Bergman's focused approach on single-tenant environments appears to mitigate risks associated with conventional multi-tenant logistics properties. The foresight exhibited in acquiring this asset demonstrates an understanding of market dynamics and evolving consumer needs.

Ultimately, if Meyer Bergman continues to leverage its expertise in identifying strategic assets influenced by macroeconomic trends, this acquisition could indeed prove to be a lucrative investment in the long term.

View Original Article