One year after its launch, the Alpha Logistics Real Estate platform, created by Belvedere Capital and Arthur Loyd Asset Management, has completed seven transactions on behalf of third parties, representing 214,000 sqm and 228 M€ of committed capital. A look back at the first 12 months of its existence with Bruno Cohen, one of the founders, who also gives his outlook of a logistics market now facing " generalized caution". Interview.
Business Immo: Where does Alpha Logistics Real Estate stand one year after its creation by Belvedere Capital and Arthur Lloyd Asset Management ?
Bruno Cohen : We have already validated our business model, which was to create an independent pure player dedicated to logistics. Our platform covers a broad spectrum, from identifying opportunities to acquisition, asset management and structuring of vehicles and financing, right through to disposal. We act on behalf of third parties, institutional investors, most of which are foreign. Our goal is to help them enter and develop on the French market primarily.
BI: Does this mean that it is difficult to penetrate the French market without outside help?
BC: Even for local investors, it can sometimes be tricky. It has become an extremely competitive market, with a lot of capital wanting to get into it. Add to these new entrants and scarcity of supply, linked in part to regulatory constraints, and you get a tense market... In short, you must know how to "read" all this.
BI: You have already acted on behalf of Europa Capital and Barings: are you now counting on a recurrence of your joint interventions?
BC: The philosophy of Alpha Logistics Real Estate is to accompany large investors on the long term. It is our DNA. We choose our clients for that: we are not here for one-off deals - which are nevertheless always possible. Understanding our investors' strategies well, so that we can even suggest avenues they might not have thought of, and follow them over the long term, is certainly our trademark. To do this, we must be irreproachable from start to finish.
BI: In one year, have these investors' views on the French market changed?
BC: In this market, we have gone from euphoria, which translated into exuberant yield cuts and price appreciation, to a generalized caution for exogenous reasons, with the war in Ukraine and inflation. There are now two types of attitudes. Some people are saying: "The decline in prices is not over, so why invest today?". That's why they are pausing at the end of this year - rightly or wrongly - and looking forward to the first half of 2023. Others, those with a long term asset management strategy, think it's not a bad bet to invest now, considering the continuous increase in rents and indexation. Another aspect is the price gap between sellers' and investors' expectations, which needs to be closed for the market to regain fluidity.
BI: Some sellers are forced to act...
BC: Yes, driven by a need for refinancing. Developers who bought land a year ago, meanwhile, are having to juggle interest rates and sharply rising construction costs.
BI: Where do you think the solution lies?
BC: The solution necessarily involves adjusting sales prices. Fortunately, in this environment, the growth driver remains rents. Demand is strong and diversified, and products are rare. The vacancy rate is 2.3% in Europe, according to CBRE. This is leading to an increase in rents, which is offsetting the shortfall.
BI: Let's come back to Alpha Logistics Real Estate. You recorded seven operations in one year (214,000 sqm), for €228 million committed: is it in line with your roadmap?
BC: We had set ourselves a target of 500,000 sqm. of transactions in three or four years. So we were pleasantly surprised at how quickly we launched. Especially since six of the seven transactions were signed off-market, which takes more time. We focus on the quality of the transactions, which requires a very detailed analysis. It's a very good start.
BI: As a result of this "good" start, will you increase your initial objectives?
BC: Consensus is towards the market slowing down in 2023. So we will do what the economic context allows us to do, with the continued desire to provide our expertise. Most of our clients have dedicated teams, but they need an outside or expert view, particularly in terms of local financing, photovoltaic installations - a subject we now master very well - etc.
BI: You have accompanied your investors in the Hérault and Loire-Atlantique regions, away from the famous backbone...
BC: (He smiles) At Alpha Logistics Real Estate, we consider that there are opportunities outside the backbone. For new entrants, the attraction for this backbone is very strong, just like Paris for investors in office real estate. Today, there are deserts in terms of logistics supply, whereas the entire territory must be irrigated. That's why we believe so strongly in the Atlantic Arc, which for us is a second backbone.
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