Almost exactly a year after MARK sold Crossbay I’s portfolio to San Francisco-based logistics giant Prologis for $1.56 billion, the London-based manager has held a first close on the latest fund for its specialist logistics platform Crossbay.
The firm has attracted €265 million for Crossbay II, PERE understands, and is looking to secure further commitments up to a hard-cap of €850 million. MARK declined to comment on the fundraise, but market sources revealed the manager is looking to hold a final close for the value-add vehicle in the first half of next year. The firm launched the fund in October 2022, as previously reported by PERE.
PERE understands the firm is in discussions with a range of investors from Europe, the US and the Middle East to participate in the second close of Crossbay II. Investors that have already committed are a mix of re-ups from Crossbay I and new relationships; the latter include a US family office investing in its first European logistics-focused real estate fund, and a large Asian institutional investor, according to market sources.
Crossbay is a specialist last-mile logistics platform focused on existing single-user distribution centers close to gateway cities across Europe. With Crossbay’s first fund, MARK secured €550 million in equity commitments, and employed a value-add strategy targeting last-mile assets in core European cities across geographies including Benelux, France, Germany, Spain and Italy.
Through the second fund, MARK aims to expand the platform into the UK, Denmark and Sweden for the first time. PERE understands Crossbay II has amassed an initial portfolio of over 30 assets in the UK, Germany, the Netherlands, Spain, France and Italy, and is actively acquiring value-add opportunities in prime urban locations.
One such asset is Wakefield 41, the distribution hub of the retailer Card Factory in Yorkshire, UK. According to market sources, Crossbay acquired the 135,000-square-foot building from fellow London-based manager Swiss Life Asset Managers UK with a new lease in place beginning in August.
Last year it was announced that MARK had secured €250 million in credit from Citibank to leverage Crossbay II’s initial investments, per a press release. PERE understands the two parties are currently in discussions to increase this facility. Previously, Citibank provided €500 million in financing for Crossbay I.
When the first fund’s portfolio was sold to Prologis in September 2022, it comprised 128 warehouse buildings and six development sites. The sale delivered more than 30 percent returns for its early investors, which included Nuveen, Credit Suisse, Townsend Group, CBRE Investment Management and the Qatari investment bank Qinvest. The transaction was among the largest portfolio deals in Europe last year.
Growth goal
MARK, formerly known as Meyer Bergman, began acquiring last-mile logistics assets in 2018 and launched the first Crossbay vehicle in 2020 in an effort to diversify away from a focus on retail assets. At the time, the goal was to grow the platform to €2 billion in assets under management in two to three years. At present, the platform manages €300 million in assets, sources close to MARK confirmed.
Marco Riva, Crossbay CEO and head of logistics at MARK, will continue to lead the platform. Formerly acquisitions director of Blackstone portfolio company Logicor, he oversees a team of 40 people.
The current investment climate for European logistics has stalled, amid a wider slowdown in real estate transactions caused by the rapid rise of interest rates over the past year. According to broker CBRE, European industrial investment was down 47 percent in Q2 2023 compared with a year earlier. That said, investment volume has improved relative to the first quarter of 2023, with the €8 billion transacted in the region representing an increase of 15 percent on Q1.
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