GIC, Melcombe Partners tie up to acquire European urban logistics assets

Singapore sovereign wealth fund GIC and European urban logistics investment manager Melcombe Partners have entered a joint venture to acquire and develop urban logistics properties in Europe.

The JV plans to acquire and develop last-mile distribution centres in gateway cities in the UK, France, German, Spain and the Netherlands, GIC said in a release on its website Monday.

Melcombe will source and manage the assets, the statement said.

Lee Kok Sun, chief investment officer of real estate at GIC, said the deal reflected GIC’s confidence in the logistics sector’s long-term potential.

“The urban logistics sub-market will benefit from positive fundamentals, reinforced by increasing occupier demand due to accelerating e-commerce adoption and changing supply chain management strategies,” Lee said in the statement. “We believe the Venture’s focused strategy, with the management of a skilled partner such as Melcombe, will generate resilient returns in the long run.”

Ludovic Bernard, a partner at Melcombe Partners, said the JV would tap into Europe’s fragmented logistics markets as the sector sees tightening supply and restrictive land-planning rules in large cities.

In an August report, BNP Paribas Real Estate said Europe’s logistics and industrial sector was a “bright spot” as sectors benefitting from the COVID-19 pandemic are seeking more space.

“The logistics market showed good resilience during the crisis as market fundamentals remain healthy with low vacant space and strong demand boosted by e-commerce,” the BNP Paribas report said.

A September report from real estate servicer Savills said the average European vacancy rate for the sector rose to 5.8 per cent from 5.1 per cent in the first half of this year, but remained low by historical standards. However, a shortage of available space was expected to spur tenants to renew leases, Savills said.

Savills added that European prime logistics rents were stable in the first half of this year, with growth in markets including London, Hamburg and Frankfurt offset by declines in other markets. It forecast rental growth would be subdued through 2021, but added the rental growth trajectory for last-mile logistics would remain positive amid a shortage of land for the segment in urban areas.

The average prime logistics yield was stable at around 4.58 per cent, Savills said.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.