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Singapore's sovereign wealth fund moves closer to logistics REITs

2023-11-28T17:08:29.604Z

Highlights: Singapore's sovereign wealth fund moves closer to logistics REITs. P3, the European real estate company of the GIC fund, plans to reach one million square metres of industrial platforms and warehouses in Spain by 2024. The expansion of surface area will also entail an increase in the modest workforce of the REIT, which is 100% owned by the Singapore investment fund. The company estimates that the more than 300 assets they have add up to a market value of around 8,300 million euros.


P3, the European real estate company of the GIC fund, plans to reach one million square metres of industrial platforms and warehouses in Spain by 2024


The REIT (listed real estate investment company) P3 wants to enter the Olympus of logistics owners in Spain. The company, which is 100% owned by Singapore's sovereign wealth fund (GIC), will end 2023 with a portfolio of 833,000 square meters of industrial platforms and warehouses. As it also has projects underway for 190,000 square meters, and already owns or has a contract with an option for exclusivity of land for half a million square meters, the company expects to exceed one million square meters in the medium term. But the first milestone of that journey will come as early as 2024, according to the firm's plans. P3 expects to exceed one million square meters "by the end of next year," said its general manager in Spain, Javier Mérida, in a presentation to the media held on Tuesday in Madrid.

Although the logistics REIT is already one of the most important in this sector in Spain, the expansion of its portfolio will allow it to join the select group of companies that are already millionaires in terms of surface area. This requirement is met by Merlin – the largest REIT on the Spanish stock market and owner of a wide variety of assets (such as offices or commercial spaces) – and three other specialised companies: Logicor, Prologis and Montepino. P3, therefore, would be the fifth real estate company (some commercial giants also own vast facilities) to exceed one million cubic meters of logistics space.

The expansion of surface area will also entail an increase in the modest workforce of the REIT, which is 100% owned by the Singapore investment fund. Of its 270 employees across Europe, 17 work in the Spanish division. By 2025 (inclusive) it expects to incorporate five more people, according to the plans that Mérida has laid out. "One of the strategic changes in the last year is to dedicate more resources to asset management, which allows us to have better control of real estate, investments and provide a better service to our clients," said the CEO. What is not planned is to go outside its current geographical areas of activity (Catalonia, Madrid-Guadalajara-Toledo, Valencia, Malaga and the Basque Country) although it does expand its footprint within these.

The executive described a relatively quiet year for the company in Spain. Through the direct acquisition, P3 has only incorporated two warehouses in Picassent (Valencia) in 2023 totalling just under 24,000 square metres. Mérida has justified this by the lack of agreement between potential buyers and sellers on transaction prices at a time of falling real estate valuations across Europe. "We believe that in Spain there is still a long way to go for adjustment, in other European countries they have been faster, and we expect an adjustment for next year," he said. In other words, they are waiting for more opportunities that will lead the GIC to take out the checkbook in 2024 and in the meantime they continue to develop projects on their own land, which already accounts for 40% of their assets.

Based in Prague, as the origin of the entire continental portfolio is in the Czech Republic, P3 is one of the largest logistics real estate companies in Europe. It is present in 11 countries (following the entry of the United Kingdom this year) and totals 8.3 million square metres. The company estimates that the more than 300 assets they have add up to a market value of around 8,300 million euros. Germany, with more than three million square meters, is its largest market, followed by the Czech Republic. The third and fourth positions in terms of real estate volume are disputed between Poland and Spain, something that the company's plans for the latter country could help to decide in the coming years.

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Source: elparis

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