Hines makes significant Italian real estate investment

International real estate firm Hines has reached a binding agreement for an off-market investment to acquire 20 logistics assets located between Emilia Romagna and Lombardy through the Italian fund HEVF II Italy managed by Prelios SGR on behalf of the Hines European Value Fund 2 (HEVF 2).

The transaction involves the acquisition of the real estate portfolio from four different selling companies and the simultaneous 15-year lease of the same portfolio to Snatt Logistica Group, a leader in the third-party logistics (3PL) sector focusing exclusively on the fashion industry.

The portfolio of 20 logistics assets provides a total of 200,000 sq m of logistics space around Milan, Parma, Reggio Emilia and Bologna. They are strategic, well-established logistic centres that enjoy effective, rapid connections with Italy’s main cities and the rest of Europe.

The off-market investment was completed on behalf of the HEVF 2, which is targeting logistics assets in key locations across Europe. This latest investment adds to HEVF 2’s recent investment in four new industrial and logistics assets in Northern Italy in Bologna, Tortona, Montichiari and Brescia, totalling over 180,000 sq m of class A space. When combined with the Fund’s additional logistics assets across Europe, HEVF 2 now has an aggregate logistics portfolio of over €700m.

Snatt Logistica Group, a leading logistics operator in Italy, is currently managing the assets and following the transaction will become the tenant. Snatt Logistica Group specialises in the handling, storage and distribution of goods for third parties in the fashion industry via multiple channels including e-commerce.

Snatt Logistica Group, with a turnover of c.€60m in 2021, thanks to a multi-year industrial plan with strong growth prospects, manages various distribution centres in Europe and across the world, often in exclusive relationships with some of the most important and iconic international fashion brands.

Snatt Logistica Group also uses an innovative distribution method, characterised by technological automation, with a storage model based on the exploitation of cubic volume via the most modern and efficient customised storage structures, based on the specific needs of each customer. Snatt Logistica Group also provides additional product customisation services, carried out directly at the logistics assets themselves.

For example, some of the warehouses are equipped with 3D printer and embroidery machines, operated by skilled, reliable professionals for tailor made customisation. This is also made possible thanks to an innovative proprietary management information system (WMS), constantly evolving, to satisfy the ever-increasing customer requests for process customisation.

Selecting a partner like Snatt Logistica Group falls within Hines’ strategy to identify companies within its own supply chain that have a strong approach to ESG. Snatt Logistica Group focuses on an investment policy with sustainability embedded into its business processes to include environmental, social and human issues, focusing on the wellbeing of its employees and their families, as well as on the local territory and the promotion of activities in favour of culture, art, and community connection.

Over the last 12 months, Hines has developed a logistics platform of almost 600,000 sq m across Northern Italy with an investment of around €500m in 2021.

Hines’ focus on the logistics sector in Italy aligns with rapidly growing demand, as demonstrated by the increasing number of international tenants that are settling in Northern Italy – an area that covers 15% of the overall number of square metres currently rented out nationally with a vacancy rate of c.2%. The sector is also undergoing significant transformation both in terms of logistics structures themselves and their locations in cities. This means investors are adopting a new approach to logistics assets including their planning, development, and connections to important touchpoints such as shops in town centres.

“We are pleased to start 2022 with an important investment in the logistics sector that consolidates our presence in the main intersections in Northern Italy,” commented Mario Abbadessa, senior managing director & country head of Hines Italy. “At Hines, we believe in the potential of the logistics sector in Italy and have set an investment target of around €1bn in 2022. We are proud to collaborate with Snatt Logistica Group, which is an international 3PL logistics leader in the luxury fashion industry, and we are certain that we will be able to develop a shared path for growth, guided by common values, including ESG, which is key to our DNA.”

Paul White, senior managing director and fund manager for HEVF 2 at Hines, commented: “This is an attractive portfolio of assets with a strong, innovative tenant at the forefront of Italy’s fast-growing third-party logistics sector for the fashion industry. We believe that e-commerce will continue to drive long-term demand for high quality logistics facilities in Italy’s northern cities, pushing the value of these investments forwards, while there is also a significant opportunity to enhance the sustainability performance of existing assets here.

“This is aligned with our ESG objectives as recognised by GRESB, with HEVF 2 achieving the award of Overall Global Sector Leader in the Diversified Office/Retail category for sustainability performance in 2021.”

Hines was advised by Cappelli RCCD, EY and Yard Reaas Group. Snatt Logistica Group was assisted by White & Case, Studio Dicierre and Studio Mattioli.