Logistics portfolio defaults close to zero during coronavirus crisis
Among tangible assets, logistics properties are one of the most robust property asset classes, even in times of crisis. While funds with retail, office and hotel properties have faced extensive suspended payments or restrictions and can expect more of these as a result of the coronavirus pandemic, portfolio defaults for logistics funds are close to zero. “Investors can even generate added value during the crisis through skillful negotiation. This is inconceivable in other commercial property asset classes during the coronavirus crisis,” comments Umut Ertan, founder and partner in RLI Investors, an independent asset and fund manager specialising in logistics properties.
“Companies that have gotten into short-term difficulties need a long-standing personal contact partner by their side who understands their business model,” says Umut Ertan. “Quickly sounding out targeted solutions together greatly benefits the performance of the funds as well as the interests of the institutional investors.”
In the open-ended, fully invested, specialised property AIF “RLI Logistics Fund – Germany I”, which RLI launched in 2016 together with the third-party AIF manager IntReal International Real Estate Kapitalverwaltungsgesellschaft mbH, Hamburg, only a deferral of 2.5 months’ rent for one user is needed for the start of next year, which is currently being negotiated.
“This corresponds to 0.3% of the fund’s annual rent,” reports Katrin Poos, Managing Director of RLI Investors. “For the follow-up fund, ‘RLI Logistics Fund – Germany II’, one month’s rent has been remitted to one tenant, in return for which the tenant easement has been adjusted. With another user, the repayment of two months’ rent has been agreed for the beginning of next year. In addition, a new rent model combined with an extended lease has been agreed with one tenant in exchange for the remission of 2.5 months’ rent,” adds Katrin Poos. Both funds are no longer in distribution and can no longer be subscribed.