LIP Invest, the Munich based investment specialist for logistic real estate is launching its third logistic real estate fund. This is the third since 2018. The open Real Estate Special AIF “LIP Real Estate Investment Fund – Logistics Germany III” (LIP Logistik III) will, as the previous funds, exclusively invest in Germany in the Core+ risk class.
Julia Olivia Oechsler
“Logistics Real Estate is proving to be an anchor in the crisis for many investors. The trend towards a reversal of globalisation, which began a number of years ago, is likely to be further accelerated by the Corona crisis. In particular, sectors such as the automotive and pharmaceutical industries will have a greater need for storage space closerto production sites as a result of the expected partial relocation of supplychains. In addition, it can be assumed that the already high growth in onlineshopping will increase more quickly as a result of changes in purchasing habits, which are now accompanied by a high demand for space,” says Bodo Hollung, Partner and Managing Director of LIP Invest.
“An increasing number of investors around the world are feeling more comfortable with logistics realestate in Germany and the combination of stable value and reliable rental income”, explains Hollung as the reason for the unchanged attractiveness of the asset class.
LIP Funds have invested €800 million in logistics real estate since 2018
The initial fund “LIP Real Estate Investment Fund – Logistics Germany” (LIP Logistik I) from 2018 completed its final closing at the end of 2019 with €190 million in equity, following additional investments from existing investors. With 14 property purchases and an investment sum of around €340 million, the investment phase was completed with the last purchase of a logistics property in Fürth in April 2020.
The "LIP Real EstateInvestment Fund - Logistics Germany II" (LIP Logistik II), which was launched in 2019, completed final closing with equity of around €260 million. Including properties that are currently in the acquisition process, the second LIP fund has already invested €425 million in high-quality logistics realestate in prime locations. It is expected that LIP Logistik II will also be fully invested soon with one more planned acquisition.
LIP Logistik III open for subscription
The “LIP Real Estate Investment Fund – Logistics Germany III” (LIP Logistik III) is now open to institutional investors for subscription. Several institutional investors have already subscribed to the fund or committed to invest. A first acquisition in an attractive Bavarian logistics region is already in the due diligence.
"We have received great encouragement from institutional investors from all circles, including an increasing number of savings banks and investors who know us from previous joint funds. Fortunately, investors in our first fund are already back in our third fund," says Bodo Hollung, who is very pleased with the interest in LIP funds.
As with the previous the funds, this fund also focuses exclusively on German logistics real estate. "Compared to other European countries, Germany benefits from its central location, its well-developed infrastructure, its population of around 82 million and by far the largest logistics market volume of around €280 billion due to the low volatility of returns with a very good risk/return ratio. This became particularly clear during major upheavals on the capital markets, such as the recent global economic crisis in 2008/2009," says Sebastian Betz, LIP's authorised signatory who is responsible for all acquisitions.
As part of its broad diversification, the fund will focus on locations especially suited to logistics with sustained demand for space and on properties with rent growth and value creation potential. By refraining from purchasing portfolios, the aim is to further reduce risk through choosing a range of individual property volumes, varying property types, different lease terms and investments invarious logistics segments.
In addition to economic objectives, the fund will also pursue aspects of sustainability, social responsibility and corporate governance (such as ESG).
As was the case with the first two funds, LIP can draw on a real estate pipeline with a current value of €400 million thanks to its good market access and broad network. This allows a quick release of capital.