Hines European Value Fund 2 invests in three logistics assets in Italy

Hines, the international real estate firm, has agreed to invest in three new industrial and logistics assets in Northern Italy on behalf of its Hines European Value Fund 2 (HEVF 2), from leading Italian logistics developer, FAP Investments, for €75 million. 

The three sites, located in Tortona, Montichiari and Breschia, will span over 100,000 square metres of class A space, upon completion in the first half of 2023. Each asset is situated in a key strategic location for Italy’s e-commerce and manufacturing industries with excellent transportation links which is likely to appeal to prime credit tenants. 

The Tortona asset will consist of two warehouses, totalling c55,000 square metres, the Montichiari site covers an area of over 30,000 square metres, and the Brescia location will become home to two last mile logistics warehouses, covering a total area of c15,000 square metres. 

Furthermore, each asset will be designed and built according to the highest international standards of sustainability and energy efficiency, inspired by modern ESG criteria, to include the installation of electrical panels, the use of electric vehicle fleets, an energy consumption performance monitoring system, common spaces dedicated to employee wellbeing and the development of green mobility programs.

In Italy, the logistics market is growing rapidly due to the inability of its current infrastructure to meet burgeoning demand. In 2020, Itay’s e-commerce turnover amounted to a record €48.2 billion with approximately 3.2 million new online users underlined by the impact of the global pandemic. Hines intends to invest a total of over half a billion euros in logistics assets in Italy by the year end focused on the construction of proprietary logistics hubs built from scratch on greenfield sites. 

This acquisition builds on Hines’ existing partnership with FAP Investments, who continue to develop the 82,219 square metres Castel San Pietro Logistics asset, near Bologna, which HEVF 2 signed to acquire in December 2020 and remains in the process of pre-leasing. 

The HEVF series invests across the major real estate sectors. HEVF 1 focused on core-plus and value add office investments, and HEVF 2 is most active in the logistics and living space. Logistics is expected to comprise the largest sectoral allocation of HEVF 2 and the Fund will continue to pursue portfolios of this nature, assuming leasing risk with strong conviction in the market dynamics for new high-specification class A logistics assets in key locations across Europe. 

Paul White, Senior Managing Director and HEVF 2 Fund Manager, at Hines, commented: “We continue to see a very compelling opportunity to accumulate new class A logistics assets and take leasing risk in the Northern Italian market. On the fundamentals side, going into 2020, vacancy rates were already very low and the new supply pipeline very thin. Increasing consumer demand for online goods, and corresponding ramp-up in distribution, has pushed demand on quickly and we see rents following. At the same time, a larger pool of institutional investors are looking for exposure to quality logistics assets, particularly for income at scale. We believe our timing in accumulating a meaningful Northern Italy portfolio can capitalise on these dynamics.”

Mario Abbadessa, Senior Managing Director and Country Head of Hines in Italy, added: “We are proud to confirm the strategic acquisition of three sites in Northern Italy which marks an important step for the ongoing development of our logistics platform across the country. We will continue to strengthen our dedicated logistics team and source local strategic partnerships, such as the one with FAP Investments, to drive forward our growth as we commit to investing capital in the logistics sector.”

HEVF 2’s capital raising is concluding with successful speed of deployment. In parallel, with this investment, the Fund will be over 70% allocated to 10 investments across France, Italy, Germany, UK, the Netherlands and Spain with several other investments also in exclusivity.

Advisors on the transaction include: Nctm Studio Legale, EY, YARD REAAS and GVA Redilco.

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