The WOOD & Company group opens a new WOOD & Co. Logistics Sub-fund and thus enters the logistics segment. The new sub-fund is designed for qualified investors. In the euro class, it targets an annual return of 15 percent with an investment horizon of at least three years. The fund’s unique strategy is to invest in the development of logistics properties, where the investor gets the opportunity to benefit from the developer’s yield. The first acquisition of the new sub-fund is a planned investment in the construction of the third stage of the 7R Park Tczew III project near Gdansk, Poland. Other logistics projects in Central Europe are in the pipeline.
WOOD & Company Real Estate Fund now includes a sub-fund focused on industrial parks, the WOOD & Co. Logistics Sub-fund. WOOD & Company is thus adding logistics parks to its portfolio of commercial properties beyond existing retail and office buildings. It enters the logistics segment as an investor in the 7R Park Tczew III logistics park development project. “Poland is one of the most attractive investment markets in the logistics sector. Warehouse rental, energy and labour costs here are among the lowest in Europe, being up to one-third lower than in the Czech Republic and more than 60% lower than in Germany. Within the EU, Poland is the number three logistics player and the market has been growing at a rate of 16% annually for the last five years. Tenants pay an average of EUR 5.5 per square metre to rent the most modern industrial parks,”says Jiří Hrbáček, director of real estate funds and vice-chairman of the board of WOOD & Company.
Poland, region of opportunity
According to Hrbáček, it makes sense to continue looking around the Polish market in the coming years, as the country’s economic situation is on an upward trajectory. In 2024 and 2025, Poland should see solid economic growth, with GDP projected to increase by 2.4% and 3.3% respectively. Current inflation of 11.9% is expected to fall to 5.2% next year and further to 3.6% in 2025. The unemployment rate is at its lowest level since 1990.
New sub-fund from the dynamic logistics segment
WOOD & Company’s real estate sub-funds have been delivering impressive long-term returns since 2016. The company is building on these successes by entering the logistics commercial real estate segment and opening a new WOOD & Co. Logistics Sub-fund. This is a Euro-class investment opportunity for qualified investors with a target annual return of 15% and a recommended investment horizon of at least three years.
The sub-fund’s strategy is to invest in the construction of state-of-the-art warehouses in proven locations that meet demanding sustainability requirements. Investors thus have a unique opportunity to benefit from the development yield. “We want to partner with developers who have the appropriate expertise, are willing to participate in the financing of the project, bear the potential risk and at the same time support a common goal leading to success. Once construction and leasing is completed, the logistics buildings will be sold to maximise the return for investors,” Hrbáček adds.
Investment opportunity in an emerging region
The acquisition of WOOD & Co. Logistics sub-fund is the planned construction of the 7R Park Tczew III project. It is an investment in the construction of the third phase of an industrial park in the Pomeranian region. 7R Park Tczew is strategically located close to the Polish town of Tczew, right next to the A1 motorway, which connects Gdańsk with Łódź and continues to the Czech border. “The first two phases of the project have been successfully completed and occupied by our company 7R and have now been transferred to the new owners, who are global and internationally renowned real estate investors. The construction of the third phase, in which 7R is involved not only as developer but also as co-investor, is planned with WOOD & Company and includes four modern industrial halls with a total leasable area of 153,000 sqm, designed with an emphasis on innovation, sustainability and functionality,” explains Christopher Zeuner, CIO and member of the 7R Board of Directors, adding: “68% of the first building is already pre-leased to a major logistics company. Given the attractiveness of the region, we are confident that once completed, the remaining space will be occupied seamlessly.” The 7R Park Tczew III project has excellent technical parameters and meets stringent sustainability requirements. A photovoltaic power plant is installed on each building and the building has been awarded BREEAM Very Good certification. “The location suits our purpose; we want to focus on logistics regions offering a combination of growth potential, promising yields and stability at the same time. In the future, we plan to build more logistics projects within the Central European region,” Hrbáček concludes.
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7R is a dynamically developing developer based in Poland, operating in the commercial real estate market and offering Class A warehouses for lease. The company caters to a variety of businesses by offering warehouse and industrial space including built-to-suit (BTS) projects. Its portfolio includes large-scale logistics parks as well as small business units (SBUs) and urban warehouses known as 7R City Flex. To date, 7R has successfully completed investments totalling 1.8 million sq.m. and currently has approximately 2.3 million sq.m. of GLA under development in Poland and the Czech Republic. To demonstrate its commitment to sustainability, 7R is actively involved in ESG activities, acting responsibly on the environment, local communities and corporate governance. For more information, please visit www.7rsa.pl.