Barings Grows Swedish Logistics Portfolio

The $104 million sale-leaseback expands the company’s European logistics holdings by four buildings and 1.3 million square feet.

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Working on behalf of institutional investors, Barings has acquired four logistics assets in Norrköping, Sweden, a major logistics hub, for about $104 million (€92 million) in a sale-leaseback transaction.

The portfolio totals about 1.3 million square feet (122,000 square meters) of net rentable space and is fully occupied by PostNord TPL AB, a third-party logistics provider owned by the Swedish and Danish governments. Two units, representing 75 percent of the total income, offer Class A space and are leased on 15-year terms, while the other two have four years remaining on their leases.

READ ALSO: KKR Acquires Stake in European Logistics Company

Norrköping is Sweden’s fourth-largest metro and home to the Port of Norrköping. The city is close to Stockholm, Gothenburg and Malmö; is a crossroads for the E22 and E4 motorways; and is within 2.5 hours of 40 percent of Sweden’s population, or 4 million people.

Barings’ management portfolio in Scandinavia includes offices, retail and residential properties and now also industrial space. In a prepared statement, Thorsten Slytå, Barings managing director & head of Scandinavia, commented that e-commerce penetration in Sweden is ahead of southern Europe, but lags that in the United Kingdom and Germany. 

Gunther Deutsch, managing director, head of real estate transactions – Europe, added that Barings currently is pursuing nine potential transactions in the logistics sector. The company is a subsidiary of MassMutual and one of the world’s largest diversified real estate investment managers.

E-commerce Going Strong

E-commerce growth in Sweden is expected to be healthy this year, driven in part by a population that includes ample digital natives and a focus by vendors on improving the delivery experience, according to a 2020 outlook from CBRE. “The increased need for last-mile logistics to meet consumer expectations of fast deliveries will increase the demand for logistics space in city fringes.”

Because logistics space can be built more quickly than office, provided that zoning and related issues don’t present obstacles, CBRE predicts that logistics rents in Sweden will remain flat this year. In landlords’ favor, however, the forecast says, logistics tenants are “stickier” than those in the office sector and are less inclined to take the risk of moving to new quarters.

In January, Barings purchased from Kennedy Wilson a group of 10 retail properties in Spain, all of them leased to leading European supermarket chain Carrefour.

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