Danish début with DKK 1.2 billion at hand

In July, W.P. Carey, a publicly listed US property investor, purchased a portfolio of buildings, with carrier Danske Fragtmænd as the tenant – and with EDC Erhverv Poul Erik Beck as the adviser. In an interview with Investor Focus, Finnish Arvi A.I. Luoma, head of European investments, explains the background to the purchase and the future plans in Denmark.

Why is Denmark interesting to W.P. Carey and other international property investors?

“We see Denmark as an attractive investment market because the economy is strong, it’s easy to conduct business and the conditions for property investments are good. We believe that the warehousing/logistics/production segment has a shortage of good properties, so consequently the Danske Fragtmænd portfolio was a unique opportunity to acquire a solid portfolio of logistics properties with long leases.”

For how long had W.P. Carey kept an eye on the Danish market before acquiring the Danske Fragtmænd portfolio?

“Being responsible for the European property investments, I had already investigated the Danish market a decade ago. We invested in Finland in 2001, in Sweden in 2005 and in Norway in 2014, so it was about time that we secured an attractive investment in Denmark.”

When is the next Danish investment likely to be made – and how much does W.P. Carey expect to invest in Denmark?

“We’re constantly on the look-out for investment opportunities – in all markets. However, we would very much like to invest more in Denmark and in all segments, especially on sale-and-lease-back terms or in new constructions tailored to users. In Norway, for instance, we made our first investment at the beginning of 2014, and by end-2015, following several acquisitions, had reached investments of around USD 400 million (almost DKK 2.5 billion, ed.). But we’re unable to comment on any of our ongoing transactions until they’re published.”

How can a large, international investor such as W.P. Carey with many experts benefit from cooperating with local commercial estate agents in, for instance, Denmark?

“We find it important to have a flexible and efficient investment team that covers all of Europe. Advisers such as EDC Erhverv Poul Erik Bech are always abreast of movements and trends in the local market, and that knowledge and insight is important to us. In the case of Danske Fragtmænd, EDC was aware of the portfolio and saw a possibility of effecting an off-market sale that perfectly met our criteria. I’ve been in contact with EDC for more than eight years, and we’ve had an ongoing dialogue, so I’ve been able to follow the market. At the same time, EDC has gained deep insight into our wishes and needs, which enabled the company to find an excellent investment for us. Knowledge of the local property market is of great value to us.”

The Danske Fragtmænd deal

•14 logistics properties and head office, a total of 184,600 m2

•Price: DKK 1.2 billion

•Buyer: W.P. Carey

•Adviser: EDC Erhverv Poul Erik Bech represented by Helle Nielsen Ziersen, senior client director and partner

•Seller: Standard Life Aberdeen represented by Capital Investment

•Off-market transaction, published in July 2018

•Complements W.P. Carey’s portfolio in Finland, Sweden and Norway

W.P. Carey

•Established in 1973 by now-deceased William Polk Carey

•International property investor, listed on the New York Stock Exchange

•Manages European investments from London

•Approximately 900 properties at more than DKK 40 billion, distributed on all segments

•Just over 40% invested in warehousing/logistics/production

•Just over 3% invested in Finland/Sweden/Norway

Helle Nielsen Ziersen

Partner, Director, Head of International Relations, MRICS, MDE
Phone: +45 58588717
Mobile: +45 40999946
E-mail: hni@edc.dk