Singapore’s sovereign fund GIC is rekindling the sale of a logistics portfolio in Spain. Under the name Arc Project, P3 Logistic Parks has placed for sale a long-term leased property portfolio in central Spain, with locations such as Toledo and Loeches, according to market sources cited by ACTIVOS, the economic vertical of Prensa Ibérica.
The same sources indicate that the warehouses on offer by P3 had appeared on the market before, without finding a buyer. They are mostly facilities in logistics secondary zones and not easy to sell, the sources explain.
On March 12, P3 sent a market disclosure to the stock exchange where it trades, Porfolio Stock Exchange, acknowledging its interest in starting the sale process of some subsidiaries or assets held by its subsidiaries, representing between 5% and 15% of its total Spanish real estate portfolio, with the aim of identifying opportunities and optimizing value. The gross accounting value of all assets, as reported in its 2022 accounts, stands at 618 million euros, while CBRE’s property appraisal exceeds 637 million.
Se reactivates the sale of logistics portfolios
In recent weeks, buoyed by stable interest rates, several logistics portfolios have entered the market, a type of real estate investment that has seen fewer transactions in recent months. Among the latest portfolios entering the market is Project Venus, a trio of warehouses in Illescas in Toledo, Marchamalo in Guadalajara, and Valls in Tarragona, which the developer GLP plans to sell for 100 million euros at a 5.5% yield. Also on the market is the Cube Portfolio, owned by Delin Property.
Furthermore, last Friday Azora, through its MilePro Logistics vehicle, closed the acquisition from CBRE Investment Management, with Crédit Agricole’s wealth management division acting as a partner. The two equal partners bought the eleven logistics assets for a valuation of 91 million euros.
The logistics investment in 2023
In 2023, investment in logistics assets contracted by more than 50 percent, ending the year at 1,376 million euros, according to the Spain Inmologístico report from a prominent consultancy. The main reason was higher interest rates, which raised required yields for buyers and kept prices and sale terms from aligning with owners’ expectations. The study notes that the mismatch between owners and investors over price and profitability slowed market activity in the sector.
Nevertheless, the sector’s outlook remains positive, driven mainly by the growth of e-commerce. Investors are currently focusing on value-add assets where improvements can lift returns.
Industry consultancy voices optimism about a potential rate cut scenario: such a move could bring buyers closer to owners and revive investment activity in 2024. If rates ease, compressions in yields of up to about 0.75 percentage points within 18 months could occur, opening attractive investment opportunities that many will seek to seize. The positive scenario suggests initiating investments in the first half of 2024.