CBRE concludes another big logistics acquisition

The investment arm of the logistics property broker CBRE, CBRE Investment Management, has agreed with Hillwood Investment Properties to acquire “57-asset, 28.4-million square-foot portfolio of state-of-the-art logistics properties in the United States and Europe valued at approximately $4.9 billion”.

CBRE elaborated that “the portfolio includes 33 U.S. assets, totalling 19.2 million square feet, and 24 assets across Germany, Poland and the United Kingdom, totalling 9.2 million square feet”.

The rationale behind the acquisition was explained by Mr Chuck Leitner, CEO of CBRE Investment Management, who commented that the market now demanded fulfilment centres located near the customer. This property is more expensive but the price is justified by the role than it plays in last-mile delivery systems for e-retail. Mr Leitner said to the Wall Street Journal that demand for such locations in Europe was only “just getting started” as e-commerce was less developed there.

Hillwood Investment Properties is run by Mr Ross Perot Jnr. Much of its property is yet to be finished, with just two-thirds having agreed leases. However, it appears that within the US, the company is already doing business with large e-retailers such as Amazon as well as conventional retailers such as Walmart. Indeed, it seems that Hillwood was successful in anticipating the need for new types of locations. Hillwood also has a portfolio of industrial property which it is also looking to sell.

Investment in logistics property is developing in parallel with investment in transport, notably in last-mile capabilities. Although attention is being paid to the sorts of local fulfilment capabilities that CBRE has bought in this case, it should not be ignored that e-retail is having an impact along the whole of the supply chain. For example, the congestion in container ports being experienced at present is likely to result in investment in new property capable of easing the fluctuations of traffic volumes.

Source: Transport Intelligence, January 6, 2022

Author: Thomas Cullen