Madison International Realty Acquires European Logistics Stake

NEW YORK CITY – Madison International Realty, a real estate private equity firm, has acquired a 46.5 percent equity stake in the European Logistics and Investment platform (ELI). The stake was from South-African based real estate investment trust Redefine Properties Limited’s €500 million Polish real estate portfolio.

The investment platform is comprised of 14 assets in total, adding up to 560,000 square meters by European measurements. And thereof, 80,000 square meters is close to 90 percent pre-leased. There is also an additional development pipeline of 270,000 square meters slated to begin once pre-leases are secured. Minority co-investor of the platform Griffin Real Estate, which has a 7% stake in the portfolio, co-manages the platform.

As part of the deal, Madison will provide a €150 million commitment to the European Logistics and Investment platform, of which €83.7 million will be used to acquire a 46.5% interest in the existing assets and developments in progress while leaving a commitment of €66.3 million to expand the portfolio over the next few years. Redefine will match Madison’s commitment to growth capital.

“This transaction represents a rare opportunity to enter the European logistics market with a significant investment into an existing large scale, high-quality portfolio,” Matthias Cordier, managing director at Madison International Realty, said in a prepared statement. “We believe the superior market dynamics in the Polish logistics sector present an attractive entry point compared with other European logistics markets as well as asset classes in Poland. We are excited to be working alongside an established group like Redefine and with premier asset managers and logistic developers in Griffin Real Estate and Panattoni.”

The completed properties are around 95% occupied and located in Poland’s key distribution hubs of Warsaw, Lodz, Cracow, Silesia, Pomerania and Posnania Regions. As part of the business plan, the parties aim to further grow the portfolio over the next years to create a leading Polish logistics platform.

Since May 2018, Madison has been invested in the Polish market when it acquired a 50% interest in the iconic Warsaw Spire office tower from Ghelamco. The tower was sold in July 2019 to Immofinanz for €386 million. Last year, Madison also bought a controlling stake in Capital Park SA, a Warsaw-listed real estate investment company with a portfolio comprising 304,000 square meters of leasable space, 77% of which is situated in Warsaw.

“With our new joint venture partner Madison, we are able to fast track our ambitious target to build ELI into a leading player in the Polish logistics sector, along with our market-leading Polish retail platform EPP with a GAV of over €2.2billion. Poland continues to be an attractive market with its positive economic outlook and solid real estate fundamentals” said Andrew Konig, CEO of Redefine Properties, in a prepared statement.

Griffin Real Estate plans to increase its stake as co-investor and will support both Madison and Redefine in executing its growth plans in ELI, according to Nebil Senman, managing partner at Griffin Real Estate. “We believe that the Polish logistic markets will continue to grow as a key logistics hub for international e-commerce players but also an increasing number of new production companies. With Madison, we think we have identified the right partner for ELI to further capitalize on logistics real estate,” said Maciej Dyjas, managing partner at Griffin Real Estate, in a prepared statement.