Pre-interview with Wolfgang Holzberger, Managing Director and Transaction Manager at RLI, in the event of his participation at the Euroforum conference “Die Logistikimmobilie”
In the first open logistics real estate special AIF “RLI Logistics Fund – Germany I” RLI succeeded in achieving a payout yield of around 7.00 percent. The successor’s return is also well above the expected market return in the current market environment. Tell us your secret or what makes RLI different?
Due to our successful transaction history and our efficient and streamlined acquisition process, we have a dense network of portfolio holders, project developers and intermediaries that allows us good access to logistics real estate as far as possible without bidding competitions. This allowed us to acquire various new construction projects at an early stage of the project, as the salespeople see us as a reliable partner. Furthermore, we deliberately consider smaller purchase volumes. The bidder competition is much lower here.
“As part of our investment strategy, we not only buy core properties, but also high-quality properties with potential for expansion or whose value we can raise with our professional asset management”, affirms Peter Wenzel, responsible for acquistions and authorized representative at RLI.
The objects can be purchased for better returns. The expertise required for project development is provided by our experienced employees.
Can such returns be achieved on the European market?
The successful development of our funds could also be projected on the European market. The yield level of Germany is also reached for investments in the BeNeLux countries, whereas higher yields can be achieved in France. There are even better return opportunities in the Euro zone in Spain and Italy, as well as outside the Czech Republic and Poland. Our internationally experienced acquisition team, consisting of three persons, including the other managing director Katrin Poos is watching these markets closely because we can imagine an interesting product for our customers there.
In your opinion, what are the biggest challenges and opportunities for a fund and asset manager currently active in the German (logistics) real estate market?
The frequently described yield compression, especially in new construction, does not stop at the logistics real estate market. The property class has long been established as a return-maker, even among previously reticent investor groups. In addition, it can be seen that institutional investors are increasingly shopping at a low volume, which further increases competitive pressure.
The current market environment with a possible clouding of the economic outlook means that investors have to weigh very carefully whether the investments are sustainably profitable and justify the high price level.
Let’s take a look in the glass ball and make a prognosis for 2019.
We assume that the price increases of recent years in 2019 will not continue and that a stabilization of yields will occur. In demanded logistics regions (Southern Bavaria, Baden-Württemberg, Rhine-Main, Rhine-Ruhr) rent increases will occur due to the shortage of space and constant demand for space. The pressure on rents will cause B-locations to become the focus of tenants.