Madison International Realty has acquired a 46.5 per cent equity stake in European Logistics Investment platform (ELI), a circa €500 million Polish real estate portfolio, from majority owner Redefine Properties Limited, a South-African based Real Estate Investment Trust (REIT). The transaction is Madison’s first major logistics acquisition in Europe as it looks to increase its exposure to the asset class.
The platform, co-managed by the 7 per cent minority co-investor Griffin Real Estate and Panattoni Europe, comprises 14 assets totalling around 560,000 sqm thereof 80,000 sqm nearly completed with around 90 per cent pre-leasing and an additional development pipeline of 270,000 sqm to be started once pre-leases are secured. Spread across Poland’s key distribution hubs of Warsaw, Lodz, Krakow, Silesia, Pomerania and Posnania Regions and developed to a high technical specification, the completed properties are around 95 per cent occupied with a blended WALT of over 4 years. As part of the business plan, the parties aim to further grow the portfolio over the next years to create the leading Polish logistic platform.
As part of the transaction, Madison will provide a €150 million commitment to ELI, of which €83.7 million will be used to acquire a 46.5 per cent interest in the existing assets and developments in progress while leaving a commitment of €66.3 million to expand the portfolio over the next years. Redefine will match Madison’s commitment to growth capital.
Matthias Cordier, Managing Director at Madison International Realty, says: “This transaction represents a rare opportunity to enter the European logistics market with a significant investment into an existing large scale, high-quality portfolio. We believe the superior market dynamics in the Polish logistics sector present an attractive entry point compared with other European logistics markets as well as asset classes in Poland. We are excited to be working alongside an established group like Redefine and with premier asset managers and logistic developers in Griffin Real Estate and Panattoni.”
Madison has been present on the Polish market since May 2018 when it acquired a 50 percent interest in the Warsaw Spire office tower from Ghelamco. The tower was sold in July 2019 to Immofinanz for €386 million. Last year, Madison also bought a controlling stake in Capital Park SA, a Warsaw-listed real estate investment company with a portfolio comprising 304,000 sqm of leasable space, 77 per cent of which is situated in Warsaw.
“With our new joint venture partner Madison, we are able to fast track our ambitious target to build ELI into a leading player in the Polish logistics sector, along with our market-leading Polish retail platform EPP with a GAV of over €2.2billion. Poland continues to be an attractive market for Redefine with its positive economic outlook and solid real estate fundamentals,” says Andrew Konig, CEO of Redefine Properties.
“Griffin Real Estate will increase its stake as co-investor and will support both Madison and Redefine in executing its ambitious growth plans with respect to ELI,” says Nebil Senman, Managing Partner at Griffin Real Estate. "We believe that the Polish logistic markets will continue to grow as a key logistics hub for international e-commerce players but also an increasing number of new production companies. With Madison, we think we have identified the right partner for ELI to further capitalise on logistics real estate," adds Maciej Dyjas, Managing Partner at Griffin Real Estate.
Robert Dobrzycki, CEO at Panattoni Europe, says: “We are excited to help ELI in developing a leading yielding logistic platform in Poland and are delighted to work together with prime investors and managers as Redefine, Madison and Griffin Real Estate.”
