Online retail behemoth Amazon has put a portfolio of its own state-of-the-art, multi-storey logistics warehouses up for sale for around €400m.
The three hubs total more than 5m sq ft and are all directly owned by the retailer. They have all either recently completed or are close to completion and are crucial distribution cogs for the Amazon business in Avonmouth, near Bristol, Barcelona and Paris.
The 1.3m sq ft triple-storey facility at Central Park in Avonmouth is due to complete imminently. The quadruple-storey Barcelona asset is located in El Prat de Llobregat, near Barcelona airport. It totals more than 2.2m sq ft and completed last year. The Paris hub in the Brétigny-sur-Orge to the south of the city is still under construction and will total 1.6m sq ft.
CBRE, the company’s retained property adviser, is undertaking the process, codenamed Project Neptune, with first-round bids due this afternoon.
The strength of the Amazon covenant has drawn interest from sovereign wealth funds, established logistics investors and institutional fund managers. Offers for both the portfolio and individual assets are being considered.
Amazon has set a fixed price for the portfolio but is allowing bidders some flexibility on the structure they are proposing to put in place (15 to 20 years). It is looking to set rents at below market value so it can lock in operating costs and minimise overheads in these areas so it can pass on cost savings to customers, as its distribution model operates on low margins. It is expected that the ultimate sales price will reflect a yield of around 4.5% across the portfolio.
The sale will be a test for investor appetite for the evolving multi-storey sheds market. The development of multi-storey sheds is being driven by the scarcity and cost of land and the advancement in warehouses’ operational technology and development techniques.
For example, GLP-owned Gazeley bought a six-acre site in Peruvian Wharf in Silvertown, east London in April to develop a 426,000 sq ft warehouse in an inner city location where land values are high and the business case for developing up is compelling.
It is understood that Amazon is currently looking at sites to build the UK’s first four-storey facility.
Where possible, Amazon buys sites that it can develop itself, as it has done with the assets in the Neptune portfolio, so it can take control of the construction process and easily make tweaks and enhancements during the build. However, this is often not possible and it usually has to work with developers that own and have optioned land.
Amazon has long been at the forefront of warehouse development and the technology within warehouses, installing solar systems across swathes of its fulfilment centres and using its 16in-tall Kiva robots to carry around parcels up to the weight of a small car.
Main image: NTI Media Ltd/Rex/Shutterstock
To send feedback, e-mail david.hatcher@egi.co.uk or tweet @hatcherdavid or @estatesgazette
