LIP Invest is launching its fifth logistics real estate fund. Like its four predecessors, the open-ended 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 submitted to BaFin.
The fund aims to generate an attractive distribution yield and, in addition to an inflation-protected investment, offers the opportunity of value increases following recent interest-related price declines. From an already largely negotiated property pipeline of over 300 million euros, purchases can be instantiated promptly. The fund is open for subscription to institutional investors with immediate effect.
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.
The fund strategy also takes into account 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. In addition to certification to assess environmentally friendly construction, all properties are to be equipped with a photovoltaic system that will enable tenants to obtain low-cost electricity.
An attractive risk/return ratio is sought by building up a broadly diversified portfolio. Due to the recent sharp rise in interest rates, leverage to improve fund performance is hardly feasible. Therefore, the leverage ratio is to be a maximum of 30 percent.
“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. Plannable rental income, inflation-protected leases and value stability make logistics an attractive investment. 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 speed, we are repeatedly able to secure suitable properties for our funds despite the fierce competition and thus regularly fulfill our investors’ desire 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, was able to complete its final closing at the end of 2022 with equity capital of 190 million euros. Despite challenging times in view of the interest rate turnaround, high inflation, energy crisis and geopolitical upheavals, the fund has now been able to acquire 11 properties with an investment volume of over 300 million euros. With one property already in the acquisition process and a further acquisition with a volume of around 50 million euros, the fund will be fully invested with 350 million euros.
LIP logistics real estate portfolio rises to 1.7 billion euros
With the launch of a fifth fund and its clear focus on logistics real estate in Germany, LIP is continuing its successful path. Over the past five years, more than 60 institutional investors have invested 950 million euros in the four funds to date. With an investment volume of 1.7 billion euros, the LIP logistics portfolio now consists of 59 properties with a total rental area of over 1.2 million square meters. The high quality of the acquired properties in very good locations is confirmed by an occupancy rate of 100 percent. With these results, LIP has achieved a TOP 3 ranking among the largest investors according to the latest Bulwiengesa study on the logistics real estate market in Germany.
