Crossbay, the first pan-European logistics platform to focus on single-tenant distribution centers, has agreed to a €400m debt facility with global investment bank Citi to help fund its continued growth and expansion across Europe.
The facility includes €180m in Day-1 commitments covering Crossbay’s near-term and advanced pipeline, which includes assets in the Benelux region, Germany, Spain, and France. Crossbay will also have access to a €220m debt accordion to support future acquisitions. JLL and Baker & McKenzie advised MARK. Allen & Overy advised Citi.
Citi has previously financed many logistics portfolio acquisitions in Europe. This announcement further grows the bank’s exposure to logistics real estate, which has proven one of the most resilient during the Covid-19 pandemic. Launched in May last year by leading private equity real estate investment manager MARK, Crossbay is designed to enable institutional investors such as pension funds and insurers to grow their exposure to the fast-growing last-mile logistics sector.
In December, MARK announced a successful capital raise for Crossbay, securing €550m in equity commitments from a global range of investors. Investors included the Townsend Group, CBRE GI, Credit Suisse, Nuveen, and QInvest LLC.
Marcus Meijer, CEO of MARK, said: “The debt facility announced today combined with the recent capital raise will allow us to continue to grow and expand Crossbay.
“To have negotiated debt financing for a pan-European portfolio during the major upheaval caused by Covid-19 is a testament to the hard work of our teams and also the strength of the Crossbay platform. “The growth of last-mile logistics is underpinned by technologically-driven structural shifts that pre-date the pandemic and we continue to see growth opportunities not only in this specific sector but logistics real estate more widely.”
Rob Hughes, Director at Citi, said: “Crossbay represented a unique opportunity to finance a genuinely pan-European last-mile logistics portfolio of scale comprising high-quality assets in core markets. “Logistics real estate, and urban logistics, in particular, is underpinned by solid market fundamentals and long-term growth drivers that make it highly attractive as an asset class. “We have an active and established presence in logistics real estate, having helped finance many large portfolio acquisitions by major investors and are pleased to be supporting Crossbay’s continued growth.”
Crossbay focuses specifically on single-user distribution centers in locations no more than a 90-minute journey to the center of the nearest city. Single-tenant assets require less intensive asset management than multi-let industrial units and are less exposed to the performance of the wider economy than larger ‘big box’ warehouses.
The platform’s c.500,000 sq. m. portfolio hosts a high-profile tenant base, counting leading 3PLs such as FedEx and DHL, as well as major e-commerce brands like Amazon, as occupiers.
The last mile logistics sector has seen accelerated growth as a result of the pandemic, with lockdowns making consumers increasingly reliant on online shopping. This has driven both investor and occupier demand for last-mile facilities. Online shopping rates are projected to continue growing in Europe beyond the pandemic. In Europe’s five largest economies – France, Germany, Italy, the UK, and Spain, which are all countries where Crossbay has a presence – the combined value of online sales is expected to exceed €345bn by 2023 according to Mintel.
In Western Europe more widely, where Crossbay is focusing its future acquisitions activity, online sales are expected to make up 15.6 percent of total sales by 2023 according to GlobalData. This is up from just 9.7 percent in 2019.
Marco Riva, head of Crossbay and logistics at MARK, said: “We believe Covid-19 has fundamentally altered the habits of European consumers and introduced new demographics to online shopping. As a result, even once the pandemic is behind us and footfall in urban retail locations starts to recover, we still expect sustained demand from investors and occupiers for high-quality last-mile logistics facilities, such as what Crossbay is targeting. “We aim to maintain the rapid pace of acquisitions that we have managed to date, which has been made possible by our strong network of on-the-ground teams that boast deep local market knowledge.”
In addition to Crossbay, MARK manages other platforms, including rental housing, life sciences, and digital real estate.
