Meyer Bergman makes logistics debut as part of diversification push

The retail-focused asset manager has continued to expand into new sectors by acquiring a nine-property portfolio in Italy.

Meyer Bergman, the London-based private equity real estate firm currently best-known for making retail investments, has made its desired foray into the logistics sector.

Last week, Meyer Bergman announced the acquisition of a portfolio of logistics assets in Northern Italy from its €816 million value-add fund Meyer Bergman Retail Partners III. The portfolio of nine assets were acquired from the Crema, Italy-based logistics specialist Logiman. The terms of the transaction were not disclosed.

The firm’s expansion into logistics is understood to be part of a larger strategic expansion by the firm into property sectors that are connected to its primary retail strategy. Besides last-mile logistics properties, it is believed mixed-use assets with office components will also feature in its investing strategy going forward.

Meyer Bergman has previously acquired mixed-used assets with an office and retail combination located close to high streets. For example, it purchased 103 Mount Street and 5A New Bond Street in London’s Mayfair district July 2015 and May 2014 respectively.

“It is a logical next step for us as a long-standing specialist in retail, a sector where retailers now operate fully integrated omni-channel businesses to stay relevant in today’s competitive environment,” Markus Meijer, chief executive of Meyer Bergman, told PERE in August.

The diversification to other property types comes at a time of declining total returns for European retail funds, according to industry body INREV’s Retail Funds Index. The index, which has analyzed data until August 2018, registered a five-year annualized return of 7.44 percent; a three-year return of 7.23 percent; and a one-year return of 5.11 percent. In the fourth quarter of last year, 2.02 percent total returns were recorded by INREV. Those returns dropped to 1.32 percent in Q1 2018 and 1.02 percent in the following quarter.

Meyer Bergman started the build-up of its logistics foray back in April, when Marco Riva came on board as the firm’s senior vice president for Southern Europe. He joined from the European logistics giant Logicor, which its founder Blackstone sold to the Chinese sovereign wealth fund China Investment Corporation for reportedly €12.25 billion.

Commenting on the latest Italian logistics acquisition, Riva said in a statement: “This portfolio allows us to establish a position of scale in the fragmented Italian market, where online retailing lags behind other countries in Europe.”

Meyer Bergman has raised three closed-ended, value-add real estate funds so far, with a total of more than €6 billion in assets, on behalf of institutional investors from around the world. According to PERE data, the latest vehicle, Meyer Bergman Retail Partners III, was launched in December 2015 and closed on a total of €816 million in January. Investors in the fund include the Sacramento-based California State Teachers’ Retirement System that invested €125 million.