1 Jul 2020

Arrow acquires logistics asset in Poland from M7

Arrow Capital Partners, the investor and operator of real estate in Europe and Asia-Pacific, has acquired the prime urban logistics asset, Airport House, in Warsaw, for its $3 billion European Strategic Industrial Real Estate (“SIRE”) platform. The asset has been sold by M7 Real Estate (“M7”) the pan-European investor and asset manager, on behalf of PVBRI, a work-out investment vehicle created by M7 and a Polish Bank to stabilise and turnaround a financially challenged portfolio of industrial, office and retail investments.

The 8,610 sq m property, which is fully let with a WAULT of 5.8 years, is situated next to Warsaw Chopin Airport and motorways connecting to major cities such as Lodz, Wroclaw and Poznan. Key tenants include pharmaceutical company, Polski Bank Komórek Macierzystych, and home improvement retailers, Castorama and Kingfisher.

Since launching last year, SIRE has invested over €300 million in acquisitions in the UK, Germany, Spain, the Netherlands and now in Poland. In addition, it is actively seeking investments in Ireland, the Nordics, Italy and Portugal as well as in Poland. It has over €200 million of capital to invest in Poland over the next 24 months in industrial and urban logistics property.

Exposure is being sought to single and multi-let industrial, distribution warehouses, ‘last touch’ logistics, and vacant assets with strong lease up potential as well as land to facilitate a build to own strategy.

SIRE is investing in core plus industrial, logistics assets yielding more than 5 per cent, vacant assets with strong lease up potential, forward commitments and selective build to own strategies. Its focus is on urban infill locations across Europe’s major cities and strategic transport hubs that are benefitting from structural trends in urbanisation and e-commerce growth.

M7 acquired Airport House with 47% vacancy and a WAULT of 3.4 years in 2017 and during its management of the property, let the remaining space in the building. M7 has sold a total of four assets spanning offices, retail and logistics across Warsaw, Poznan and Zgorzelec on behalf of PVBRI following the completion of the business plan for each asset. One asset remains in the vehicle.

Katherine Parker, Partner at Arrow Capital Partners, said: “The acquisition of Airport House is SIRE’s first in the Polish market with others to follow. It is an asset that is excellently located next to Chopin Airport, with high quality tenants and continues our investment in the European urban logistics market.”

Christian Bearman, Partner, Head of Europe, Arrow Capital Partners, said: “We have a broader range of types of acquisitions we can target with a longer-term investment horizon than most funds and have a flexible approach to the way we consider our investments. We have an extensive pipeline of opportunities we are progressing, including partnering with local developers who seek a long-term capital partner in their projects to help deliver build to own assets.”

Katarzyna Parkot, Managing Director, Poland at M7, said: “Since establishing the PVBRI portfolio in 2017, we have demonstrated our ability to stabilise assets, add value through active asset management, find suitable buyers and generate attractive returns. Our team has overcome the challenges caused by the COVID-19 pandemic and the sale is also evidence of continued investor appetite for logistics assets with diversified occupier mixes in attractive locations.”

Arrow was advised by Burlington Real Estate.