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Funding
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Equity - Logistics Value Add in North Italy

Milano
,
Italy
DEAL
001076
POSTED ON
September 2, 2020
INVESTMENT SUMMARY
IRR
20%
Multiple
2.5x
LTV
60%
First Year CoC
10%
Stabilised CoC
10%
Status
Funding
Deal #
001076
Asset Class
Logistics
Strategy
Value Add
Capital Type
Equity
Deal Size
100.0
m
Investment Size
40.0
m
Holding Period
5 Years
INVESTMENT HIGHLIGHTS
  • An arbitrage opportunity exists in the Italian light industrial real estate sector which offers the potential for outsized risk-adjusted returns of 15%+ cash flow yields with a protected downside.  The Sponsor is looking to form a JV with an equity provider in order to exploit this unique opportunity.
  • In Italy, there is not an established group of institutional or other natural buyers for Industrial real estate compared to other countries where heavy investments by institutional investors have already occurred creating large investment platforms.
  • Asset Profile: The Sponsor aims for IRR of 18.5% per asset with a targeted dividend/rental yield of no less than 10% p.a. In terms of  Capital Value identified has a target to invest at or around the vacant possession value (€300-650 /m2) and aim to also be c. 50% below replacement cost.  
  • The buildings identified are fundamental to the tenant, akin to core infrastructure. All buildings must be extremely flexible, both in terms of location and of physical structure, to allow for a variety of alternative occupiers or uses in the future.
  • Last Mile Logistics: The assets targeted offer the possibility to convert to alternative use in the future as last-mile logistics, which is entering a huge growth phase in Italy, alongside
    the global e-commerce trends.
  • The Sponsor objective is to create an investment vehicle together with an investor that will permit to capture the opportunities presented as they are identified. The final objective is to create a light industrial platform that can be sold to institutional capital in 5 years.
KEY DEAL POINTS
KEY FINANCIALS
ABOUT SPONSOR
Emerging Sponsor
The sponsor, through its specialist Italian asset management company, is constructing a portfolio of high-quality, income-producing industrial and logistics assets in Northern Italy. The sponsor is an experienced investment manager in real estate, founded in 2010. The sponsor’s founder previously worked at Blackstone Real Estate Europe and Goldman Sachs in Real Estate. The sponsor has a strong track record of out-performing business plans, with a focus on principal protection. By employing a fundamental deep-value approach, the sponsor has delivered attractive returns yet, impressively, never incurred any capital losses on its investments.
FURTHER IMAGES
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LOCATION
DEAL DATA ROOM
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INVESTMENT SUMMARY
Strategy
Value Add
Asset Class
Logistics
LTV
60%
Deal Size
100.0
m
Closing
Capital Type
Equity
Investment Size
40.0
m
Net IRR
20%
Multiple
2.5x
Holding Period
5 Years
INVESTMENT DETAILS
  • An arbitrage opportunity exists in the Italian light industrial real estate sector which offers the potential for outsized risk-adjusted returns of 15%+ cash flow yields with a protected downside.  The Sponsor is looking to form a JV with an equity provider in order to exploit this unique opportunity.
  • In Italy, there is not an established group of institutional or other natural buyers for Industrial real estate compared to other countries where heavy investments by institutional investors have already occurred creating large investment platforms.
  • Asset Profile: The Sponsor aims for IRR of 18.5% per asset with a targeted dividend/rental yield of no less than 10% p.a. In terms of  Capital Value identified has a target to invest at or around the vacant possession value (€300-650 /m2) and aim to also be c. 50% below replacement cost.  
  • The buildings identified are fundamental to the tenant, akin to core infrastructure. All buildings must be extremely flexible, both in terms of location and of physical structure, to allow for a variety of alternative occupiers or uses in the future.
  • Last Mile Logistics: The assets targeted offer the possibility to convert to alternative use in the future as last-mile logistics, which is entering a huge growth phase in Italy, alongside
    the global e-commerce trends.
  • The Sponsor objective is to create an investment vehicle together with an investor that will permit to capture the opportunities presented as they are identified. The final objective is to create a light industrial platform that can be sold to institutional capital in 5 years.
INVESTMENT HIGHLIGHTS
Funding
SUMMARY
Opportunity to participate in the acquisition of various light industrial properties across the Northern Italian corridor. The Sponsor is an experienced asset and investment manager and has identified an arbitrage opportunity across the light industrial sector with a strong pipeline already secured.
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