EXPO REAL 2016: The logistics sector is set for a prolonged period of consolidation, with demand from investors at an all time high, according to Logicor chief executive Mo Barzegar.
Blackstone is expected to divest from its 140m sq ft European logistics platform next year either through an IPO or trade sale and Barzegar says that there is the opportunity to further consolidate the sector.
“Logistics as an asset class is certainly under the spotlight. It is certainly very attractive on a risk-adjusted-return basis. Returns are very predictable and the inclusion of logistics as an asset class in the listed indices really allows a lot of sovereign wealth funds to allocate more capital to the sector.
“So demand for logistics is at an all-time high, certainly from the investor community and that is going to manifest itself in a variety of different ways. Shares of listed companies that are performing well are going to continue to see a positive impact. Opportunities to invest in direct real estate will also be closely examined.”
P3 is currently in talks with Singaporean sovereign wealth fund GIC over a sale of the €2.5bn business and Barzegar predicts that corporate deals will lead to the purchase of smaller regional businesses.
“It is still a highly fragmented market and there is the opportunity to create larger, pan-European platforms in order to achieve operational efficiency, which is a big competitive advantage in this business. Operators that are regional that don’t have scale are perfect targets,” he said.
Logicor is focusing predominantly on refining and consolidating its portfolio but is still looking to selectively grow in core markets such as Benelux, the Nordics and Germany.
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