Log4Real targets institutional capital with logistics growth

The Düsseldorf-based logistics property firm is aiming to become one of Europe’s top three logistics real estate developers following a majority buyout by Zech Group, Germany’s largest real estate developer, last year. 

Log4Real, the Düsseldorf-based logistics property developer, has launched a multi-billion-euro expansion program which will see it construct 32 million square feet of sustainable warehouses across Europe over the next three years.

It comes after Zech Group, Germany’s largest real estate developer, acquired a majority stake in Log4Real last year. Christian Bischoff, Log4Real’s chief executive, said his firm was now aiming to become one of Europe’s top three developers of logistics real estate.

To achieve this, Log4Real was intending to break the mold of traditional logistics construction by building “warehouses of the future,” which would attract capital from a fresh pool of investors, both domestically and internationally, Bischoff said. He added that his firm was targeting German and North American institutional investors in a 50/50 split.

Under the plans, Log4Real said it will construct around 9 million square feet of warehousing in 2017; 10 million square feet in 2018; and 13 million square feet in 2019 – the average investment volume per project will range from €30 million to €125 million.

The firm used research from property services company CBRE to target a number of “hot spots” in Europe’s logistics market including hub locations in Germany, Central and Eastern Europe, Benelux and the Nordic countries.

“The industrial and logistics real estate market has not kept pace with the technological and sustainable innovation already adopted in other sectors, such as offices and retail,” said Bischoff.

“There are thousands of European companies occupying premises unfit for purpose in a carbon neutral era that can potentially seize this opportunity to transform their operations. Investors will also benefit from the low risk and future-proof long-term leases we will offer prior to construction.”

Bischoff said the new warehouses would achieve sharp reductions in energy costs, which would translate directly into highly competitive market rents. By focusing on every aspect of energy efficiency – from power generation and storage to insulation and building structure – Bischoff claimed savings of 30-40 percent can be achieved on average heating and cooling.

“Normally, energy costs can represent around €0.2 to €0.3 per square foot, but with the new warehouse, and the energy savings they provide, these costs are reduced to around €0.07 per square foot,” added Bischoff.

To develop and construct the warehouses, Log4Real has partnered with Viessmann Group, a manufacturer of heating and cooling and renewable energy systems, and engineering infrastructure firm ROM Technik, also part of the Zech Group.

Bischoff, who founded Log4Real in 2012 and has 20 years’ experience in the sector, also worked for San-Francisco-based logistics giant Prologis where he was regional head of northern Europe between 2007 and 2011.