KKR Buys Stake in French Logistics Firm
- May 27, 2020
KKR continues to increase its presence in the European industrial market with the acquisition of an interest in Etche France, a Paris-based private real estate company with a portfolio featuring a gross asset value of €400 million, or approximately $438.2 million. KKR purchased the controlling stake from Groupe BMF and co-founders.
Established in 2010, Etche focuses on opportunistic and complex investments offering a high level of value-add potential. Currently, the company owns and operates a collection of more than 120 logistics, light industrial and office assets across France. Etche’s activities over the last few years include the acquisition of three logistics assets encompassing an aggregate 936,500 square feet in Mer, Leers and Thouars in 2018.
KKR and Etche have a pre-existing relationship, as the two companies have partnered on various I&L investments in France over the last six years. KKR’s purchase of the majority interest, facilitated through a European fund managed by the New York-based global investment firm, comes on the heels of the February 2020 death of Jean-Pierre Raynal, who co-founded Etche with Léon Baruc.
The investment in Etche dovetails with KKR’s pursuit of high-quality I&L properties that are positioned to capitalize on strong market dynamics. “France offers investors a number of incentives, including some of the lowest rents, as well as yields that remain attractive compared with other European markets,” according to a first quarter 2020 report by CBRE. And France’s industrial market remains poised for success in the post-coronavirus environment. As noted in the report, “The COVID-19 crisis has highlighted the major role played by logistics in the national economy. This should constitute a new growth accelerator for this asset category.”
However, it is not just France that is holding KKR’s attention; the firm has been carefully but steadily expanding its I&L footprint in Europe over the last two years. Since 2018, KKR has acquired roughly 8.6 million square feet of I&L space in the Netherlands, Italy, Spain, Ireland and France. Most recently, the company purchased a strategic stake in London-based Mirastar, a specialist developer, investor and manager of logistics real estate spanning Western Europe.