LIP Invest, a fund manager for logistics real estate, launches its fifth logistics real estate fund. The fund launch originally planned for last year was postponed due to the strategic reorientation of many investors as part of their asset allocation.
Like its four predecessors, the open real estate special AIF “LIP Real Estate Investment Fund – Logistics Germany V” will invest exclusively in Core logistics properties in Germany. The fund, which is also managed by the capital management company IntReal, will increasingly focus on climate protection in its property selection. An approval according to Article 8 of the EU Disclosure Agreement has already been approved by BaFin.
The fund aims to generate an attractive distribution yield and, in addition to an inflation-protected investment, offers the opportunity for value increases following recent interest rate-related price declines and a price correction that, in contrast to other asset classes, has been fully completed. From an already largely negotiated property pipeline of over 300 million euros, purchases can be instantiated quickly. The fund is now open for subscription by institutional investors.
Target volume 350 million euros
The new fund pursues a core strategy with a focus on new logistics buildings suitable for third party use. The focus is on modern properties in logistics-affine locations with long-term sustained demand for space, enabling continuous rental growth and value creation potential. The fund management plans to acquire 10 to 15 properties with a minimum investment volume of 350 million euros. By building up a broadly diversified portfolio, the aim is to achieve an attractive risk/return ratio. The proportion of debt financing should be a maximum of 50 percent.
The fund strategy considers different property types as well as geographical and sector diversification. Risk is further reduced by varying individual property volumes and lease terms. Indexed leases are designed to ensure value retention.
Furthermore, measurable sustainability features (as defined in Article 8 of the EU Disclosure Regulation) are integrated into the investment strategy. These include, for example, the installation of photovoltaic systems, which enable tenants to obtain low-cost electricity.
“Following the price corrections of the past 15 months and the reluctance of many investors due to the uncertain macroeconomic forecasts, logistics properties are once again at the top of many investors’ shopping lists. Predictable rental income, inflation-protected leases and value stability make logistics an attractive investment. In our opinion, the opportunity for value increases is currently higher than it has been for many years,” says Bodo Hollung, Partner and Managing Director of LIP Invest, adding: “With our large network, our proximity to the market, and our reliability and swiftness, we are repeatedly able to secure suitable properties for our funds despite the fierce competition and thus regularly fulfill our investors’ wishes for a quick capital call.”
LIP Logistics IV with final closing and completion of the investment phase
The fourth LIP logistics fund “LIP Real Estate Investment Fund – Logistics Germany IV”, which was launched in the second half of 2021, completed its final closing at the end of 2022 with equity capital of 190 million euros. Despite challenging times in light of the interest rate turnaround, high inflation, energy crisis and geopolitical upheavals, the fund was able to acquire 13 properties with an investment volume of over 350 million euros and is therefore fully invested.
LIP logistics real estate portfolio rises to 1.8 billion euros
With the launch of a fifth fund and the clear focus on logistics real estate in Germany, LIP is continuing on its successful path. Over the past six years, more than 60 institutional investors have invested 950 million euros in the four funds to date. With an investment volume of 1.8 billion euros, the LIP logistics portfolio now consists of 61 properties with a total rental area of over 1.4 million square meters. The high quality of the acquired properties in very good locations is confirmed by an occupancy rate of 100 percent. According to the latest Bulwiengesa study on the logistics real estate market in Germany, these results place LIP at the top 2 among the largest investors.
