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Innovative investment approach for sustainable urban logistics

By September 15, 2022No Comments
LogReal

73 percent of the EU population lives in urban areas, expected to rise to 77 percent by 2030. 194 billion euros in sales in European online retail will create a need for 15 million square meters of logistics space as early as 2023.

Source: LogReal.Direct

Growth is being driven primarily by urban regions, although the shortage of space in these very centers is evident. The urbanization of logistics, which is urgently needed for climate protection reasons, requires a network of inner-city micro-logistics areas. The sustainable infrastructure required for this is being promoted by forward-looking and ESG-oriented investors such as DeA Capital.

DeA Capital is an independent European alternative asset management platform with a focus on private equity, debt, multi-manager and real estate funds and total assets under management of €26.5 billion, spread across 72 funds and 15 pools. DeA Capital employs a total of approximately 200 people.

One of the largest investors in this field

The logistics market has been the focus of innovative investors for 10 years. In the meantime, logistics assets also account for around ten percent of DeA Capital’s European portfolio. “This makes us one of the largest investors in this sector,” says Dr. Wolfgang Speckhahn (LL.M. MRICS), Managing Partner of DeA Capital Real Estate Germany GmbH.

Tailored to the future and growth market of sustainable urban logistics, the DeA UrbanMILE fund is an investment approach that focuses on micro-logistics-capable properties. “UrbanMILE’s investment strategy achieves high growth through the dynamics of the e-commerce and Q-commerce (quick commerce) megatrends,” clarifies Wolfgang Speckhahn. “Urban logistics serves the last mile, where the last mile is primarily a unit of time.

For Q-Commerce, for example, delivery times of 30 minutes or less are a prerequisite. That’s where the term last mile takes on a different meaning than in ‘normal’ e-commerce.”

Concentrating investments in urban areas leads to a focus on existing properties, as cities are usually densely built-up and there is little open space. The decisive factor, however, is the infrastructure or the traffic concept.

Innovative utilization concepts

“We prefer properties that provide cash flow but can be qualified for conversion to micro logistics,” explains Speckhahn. “The investment strategy focuses on commercial real estate with innovative use concepts through flexible-use commercial space.”

The investment focus is on mature European economies and real estate markets in Germany, France, Spain/Portugal, the Netherlands, Belgium, Italy, Poland and Austria. Target locations are metropolitan regions only, i.e. Berlin, Hamburg, Munich, Paris, Amsterdam, Brussels, Milan, Rome, Madrid, Barcelona, Warsaw and Vienna.

Small urban flex areas

The long-term strategic target allocation favors micro-locations concentrated in a corridor of around one kilometer along ring roads around city centers, but which are still central inner-city locations.

The focus is on small urban flex spaces, i.e., smaller properties between 1,000 and 8,000 sq. ft. that are leased and offer stable cash flow. In addition, these spaces, e.g. former retail locations, offer the opportunity to be converted into inner-city micro-logistics.

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DeA Capital

DeA Capital is one of the leading independent European investment managers in the field of alternative investments with total assets under management of around €26.2 billion.

The platform is involved in the management and development of real estate, private equity and debt investment funds as well as multi-asset/multi-manager solutions for institutional investors. The real estate division manages an investment portfolio of over 12 billion euros with an international team of around 150 employees, which is represented locally in Germany, France, Italy, Poland and Spain. In Germany, the branches in Frankfurt am Main and Munich provide investment solutions in the areas of listed REITs and indirect real estate funds with a global or pan-European, but also national focus.

www.deacapital.com