KKR Acquires Stake in European Logistics Company

The firm purchased a strategic interest in London-based Mirastar, a new pan-European industrial real estate developer, investor and manager.
Port of Rotterdam, Netherlands. Image via Pixabay.com

Global investment firm KKR has just expanded its footprint in Europe in one fell swoop with the acquisition of a strategic interest in London-based Mirastar, a specialist developer, investor and manager of pan-European industrial and logistics real estate. Acting through one of its managed European real estate funds, KKR  purchased the stake from M7 Real Estate for an undisclosed amount.

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Mirastar made its debut in May 2019 with initial platform backing from M7 and an exclusive mandate from Goldman Sachs. Already, the company boasts a portfolio of premier big-box logistics properties and development projects in the Netherlands with an exit gross development value of more than €100 million, or approximately $108 million. Additionally, Mirastar is in the midst of making an entrée into the U.K. and Spain. Since KKR came aboard, Mirastar has purchased a 96,900-square-foot forward funding project in the Netherlands. Looking ahead, the partners plan to move forward with additional acquisitions of assets and development projects in Western Europe’s key gateway markets.

Ongoing allure of European logistics

The European logistics sector had a strong year in 2019, with absorption totaling 286 million square feet amid a market short on supply, according to a spring 2020 outlook report from Savills. The average logistics vacancy rate remains low across most European markets, including the Netherlands, Spain, Czech Republic and the U.K., which recorded respective rates of 6.5, 5.8, 3.7 and 6.7 percent. And the rapid spread of COVID-19 appears to be of little hindrance to the industrial property type. “The logistics sector will be one of the most sheltered commercial property sectors from the pandemic,” according to the Savills report. “Online retail sales growth continues to exceed analysts’ expectations and given that the COVID-19 outbreak has increased consumer dependence on e-commerce, it is likely that this shift will accelerate faster.”

Western Europe is in particularly good shape. As Savills notes in the report, U.K. Forrester’s most recent forecast suggests that online retail will account for 17.8 percent of Western Europe’s total retail sales by 2024. And assuming industry standards of 75,000 square meters of space for every €1 billion (nearly $1.1 billion) spent online, an additional 16.7 million square meters—or approximately 180 million square feet—of logistics facilities is required to accommodate online growth within the next five years.

KKR, which raised $1.5 billion in just six months for its very first real estate fund in 2013, has been notably active in Europe’s industrial and logistics market for some time. Within the last 24 months, the firm increased its portfolio in the region with the addition of roughly 8.6 million square feet of space in France, the Netherlands, Italy, Spain and Ireland.