East Capital and VGP Launch Pan-European Logistics Fund Targeting €2 Billion
Sweden’s East Capital Group, in partnership with logistics developer and owner VGP, is launching a pan-European logistics fund with a target size of €2 billion. The fund will focus on acquiring and developing modern, income-generating logistics properties in key European locations, with a strong emphasis on ESG principles and inflation-linked rental income.
Strategic Partnership and Investment Strategy
The collaboration leverages VGP’s extensive development pipeline and East Capital’s asset management expertise. The fund will adopt a Core+ investment strategy, targeting newly built logistics properties in prime European logistics hubs. A key focus will be on properties with reliable tenants and a commitment to environmental, social, and governance (ESG) standards. The gross target yield at the property level is projected to be 12-14%.
Market Drivers and Growth Potential
The launch of this fund comes amid significant structural shifts in European supply chains. The reorganization of supply chains, a growing trend towards nearshoring production, and the increasing need for resilient distribution networks are driving strong demand for modern logistics facilities across the continent. This demand is expected to support the fund’s growth and deliver attractive returns to investors.
Leadership Perspectives
Peter Elam Håkansson, founder and Group Chief Investment Officer of East Capital Group, emphasized the firm’s focus on identifying opportunities with structural growth potential and where their active management approach can add value. He stated that the European Logistics Fund exemplifies this strategy, and the partnership with VGP strengthens the initiative’s long-term prospects. Source: AMWatch
Albin Rosengren, partner and manager of East Capital Real Estate, highlighted the transformative nature of the partnership with VGP, providing exclusive access to a portfolio of modern properties in leading logistics centers. Source: LinkedIn This access allows for investment in high-quality assets with stable cash flow from the outset, creating a scalable institutional platform with a clear ESG profile.
Fund Status and Future Outlook
The European Logistics Fund is currently in the pre-marketing phase, with negotiations underway with potential investors. This initiative represents a significant step in East Capital Real Estate’s development into a broader European real estate asset platform. Source: IPE Real Assets VGP and East Capital initially set a €1.5 billion gross asset value (GAV) target for the portfolio. Source: Green Street News
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