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MIMCO GREEN VALUE, a new MIMCO AM fund for logistics and property revitalization in France

With the marketing of its new "MIMCO GREEN VALUE" fund dedicated to logistics development and real estate revitalization in France, MIMCO Asset Management is diversifying its portfolio of investment solutions with a real estate Private Equity offering in France.

In accordance with article L. 214-144 of the French Monetary and Financial Code, this fund is intended exclusively for professional and professional-like investors in France who meet the conditions set out in article 423-27 of the AMF's General Regulations: family offices, asset managers, independent asset management advisors and private banks.

This product involves a risk of capital loss. Investors should seek advice from licensed professionals.

This communication does not constitute an offer or a recommendation to purchase. The documentation (Articles of Association, Information Document and Key Investor Information Document) is only available to eligible investors and only from professionals approved and authorized by the fund.

France, a real estate market with strong fundamentals

As the second largest economy in the Eurozone, France has seen its GDP grow by 7% in 20211 in conjunction with its double A rating issued by the Fitch Ratings and Standard & Poor's rating agencies. Furthermore, the volume of real estate investments in France is expected to reach €25 billion euros2 for the same year, according to Cushman & Wakefield, the world's leading provider of commercial real estate services.

However, the health crisis has redefined consumption patterns, exacerbating pre-existing trends and accelerating the transformation of physical retail and distribution. At the same time, lifestyles have also been impacted, with a change in the needs of office users3 (flexibility, common spaces, and services, etc.) and a shift in housing needs. The latter must offer more comfort and outdoor spaces.

"The new consumer habits adopted during the lockdowns are set to take hold for the long term. We see an increasingly dynamic French rental market, with potential for rental growth, and land that is increasingly sought after. We are convinced that France will continue to offer very attractive investment opportunities for many years to come." says Ara Adjennian, Managing Director and Partner of MIMCO AM.

Increased demand for logistics and the refurbishment of obsolete assets

Since the creation of online retailing and "marketplaces" in particular, logistics has become a strategic part of successful online sales. The microcosm that connects physical retail, marketplaces, and warehouses (the players capable of coordinating a 360-degree retail supply chain) is being formed and is already preparing for the next stage, in which logistics real estate has a key role to play.

Accordingly, the French logistics market ranked 2nd in Europe in 20204, and the investment volume in logistics real estate totalled 4.9 billion euros in 20212.  The vacancy rate for logistics property was 4.5%5 according to the corporate property consultancy group CBRE.

Christophe Nadal, President of MIMCO AM, explains: "The health crisis has really reinforced the strategic nature of logistics real estate. The demand for warehouses is in direct correlation with the continued growth of online retailing, which has proven its business model during the health crisis, and with the government's strategy to reindustrialize the country by 2030. This dynamic can also be seen in the market for the refurbishment of obsolete assets. The office sector, for example, has been affected by the growth in remote working, but these recent changes allow us to integrate medium/long-term refurbishment opportunities, as our investors are attentive to the transformation of these fundamentals, which translates into attractive returns."

Pursuing a Value-Added investment strategy on French assets

With a Value-Added investment strategy in line with the MIMCO Group's philosophy, the MIMCO GREEN VALUE Fund focuses on real estate assets located in France, at communication crossroads benefiting from a demographic dynamic due to strong urbanization. 

Ara Adjennian says: "The majority of the portfolio will be made up of logistics assets (warehouses, cross-docking facilities, data centers, business parks), where demand exploded during the pandemic as online retailing spread to new types of customers and services, such as one-hour delivery. The Fund will invest more generally in assets that are obsolete and/or in need of refurbishment."

"In particular, we select obsolete real estate assets that have been discounted, such as vacant or occupied buildings, land, warehouses or industrial wasteland, and focus on refurbishing and/or transforming them and/or changing their use and/or reselling them in order to adjust the rental terms over time and thus significantly increase their value creation potential," says Christophe Nadal.

The goal of the Fund is therefore to invest directly or indirectly in real estate and operating assets, with the aim of achieving two complete cycles of acquisition, construction, and resale of the buildings over their lifetime.

"With the new MIMCO GREEN VALUE fund, the major advantage lies in the fact that MIMCO AM's teams have a thorough understanding of the French logistics and real estate revitalization market on a value-added strategy. On the one hand, their omnipresence on the ground will allow access to a refined selection of the best investment opportunities for our clients. On the other hand, their invaluable knowledge of new uses and economic operating methods will make it easier to bring obsolete assets into line with market needs," adds Bernd von Manteuffel, co-founder and CEO of MIMCO Capital.

Strong expertise across the entire property value chain

The current challenge of bringing new Value-Added investment solutions to investors is real. To develop and offer the new MIMCO GREEN VALUE investment vehicle, MIMCO AM relies not only on its in-depth knowledge of the markets in which it invests, but also on the group's expertise across the entire real estate value chain: sourcing, legal and financial structuring, asset management and property management.

"With this global approach to real estate investment, we easily stand out from other players. Indeed, there are very few of them who master the entire chain of real estate activities in several countries at the same time, and with expert teams present locally. It is this combination of skills that enables MIMCO AM to master each stage of the revitalization of a real estate asset, an approach that requires constant diligence, notes Christophe Nadal.

A renewed environmental commitment with increasingly responsible investments

The pandemic has dramatically accelerated the changing needs and desires of the population and the way we live and work, with the demand for more environmentally friendly buildings increasing at an unprecedented rate. Tenants are demanding more and more flexibility, with an emphasis on healthier lifestyles and on-demand services, which justifies an added value for sustainable buildings. These new parameters then pave the way for the expansion of a currently insufficient real estate supply.

Ara Adjennian emphasises: "The ethics of MIMCO AM, and the wider MIMCO group, are based on experience as well as transparency. In a world where the challenge of the climate emergency is the focus of attention, our aim is to improve the sustainability of the properties we invest in, thereby reducing their environmental footprint. This is the essence of our expertise in real estate revitalization, and it is to meet the expectations of new urban uses and lifestyles that MIMCO GREEN VALUE undertakes asset refurbishment and logistics development projects in France, all within the context of a responsible approach to its investments.”

The MIMCO GREEN VALUE Fund is a candidate for the SRI label for socially responsible investments and falls under article 8 of the SFDR (Sustainable Finance Disclosure Regulation). It responds to a sustained demand from investors for stabilised and accredited products.

As a reminder, MIMCO AM is a signatory of the Principles for Responsible Investment (PRI) since July 2021.

View MIMCO AM's ESG policy here.

A real estate private equity solution adapted to the re-use of capital gains on sales

By launching "MIMCO GREEN VALUE" in the form of a simplified joint stock company (SAS) with variable capital under French law and falling within the category of other Alternative Investment Funds ("other AIFs") in accordance with Article l.214-24-iii of the French Monetary and Financial Code, the Fund becomes eligible for the re-investment of capital gains within the framework of Article 150 O B Ter. The shares may be acquired via a securities account, directly or through Luxembourg life insurance policies. This product presents a risk of capital loss. Investors should be aware of the risk of capital loss and seek advice from accredited professionals.

The MIMCO GREEN VALUE AIF is an equity investment vehicle, and depending on the strategy, the recommended investment period is 6 years. The target investment amount for the AIF is limited to EUR 40 million.

This type of fund could be suitable for investors looking for an annual IRR of 7%.

In accordance with article L. 214-144 of the French Monetary and Financial Code, this fund is intended exclusively for professional and professional-like investors in France who meet the conditions set out in article 423-27 of the AMF's General Regulations: family offices, asset managers, independent asset management advisors and private banks.

MIMCO GREEN VALUE is a fund with the status of an "AIF", registered and authorized for marketing in France by the Autorité des Marchés Financiers (AMF) but not accredited, and whose operating rules are set out in the Prospectus and the Fund Regulations.

The MIMCO AM teams are available to provide you with and additional information.

 

Refrences:

  1. Les Échos, « La zone euro en route pour une croissance encore forte en 2022 », 30 January 2022
  2. Cushman & Wakefield, « Market Beat France – Investissement T4 2021 », January 2022
  3. Les Echos, “Entreprises : quand le coronavirus accélère les mutations”, 29 December 2020
  4. Supply Chain Info, « Les chiffres clés du secteur logistique », 24 August 2020
  5. Le Moniteur, « Immobilier logistique : les raisons d’une performance historique », 9 December 2021
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