Goodman European Logistics Fund oversubscribed

The Sydney-based firm’s open-ended logistics real estate fund has attracted €550 million in fresh equity from institutional investors although it stated it there was €900 million trying to get in. Together with a bond issued in March, the fund now has more than €800 million in firepower.

Goodman Group has demonstrated the popularity of its European property fund by announcing it has raised €550 million in institutional capital for the vehicle. According to the Sydney-based logistics real estate investment, development and fund management company there was demand for more than €900 million.

The Goodman European Logistics Fund (GELF), which was launched in December 2006, is an open-ended vehicle devised to provide investors with stable income returns from investments made across the European Union, outside of the UK and Greece, but also including Norway, Switzerland and Turkey.

The majority of the equity was raised via a rights issue to existing investors although additional equity from new investors was also included. The firm said that to facilitate the demand from investors, it would sell down part of its holding in the fund, effectively leaving the firm with an approximately 20 percent stake.

The GELF equity raising followed the completion of the fund’s €500 million inaugural Eurobond issuance in March, bringing total new capital raised in the first half of 2013 to more than €1 billion and, significantly, it means the fund now has a war chest of more than €800 million to invest it said.

Goodman chief executive officer, Greg Goodman called the capital raising “a clear endorsement of GELF’s offering and corporate governance model” but also how European logistics real estate was increasingly attractive to large institutional investors.

As of the end of March 2013, GELF held 95 logistics valued at €1.9 billion. The assets are spread across 11 countries, although these predominantly were located in Germany, France, Belgium and The Netherlands, countries that Goodman called “core markets”. The portfolio has “limited exposure” to Southern Europe and no exposure to Portugal or Greece. It includes 91 different occupiers and an occupancy rate of 97 percent. The average lease expiry to first break is of 4.9 years. Further, it has “minimal exposure” to land and development.