Real estate investor and fund manager Cromwell Property Group (Cromwell) will co-invest with Bain Capital Special Situations, a leading global special situations investor with experience supporting differentiated real estate platforms, to develop a 55,000 sqm modern grade A logistics warehouse in Bari, Southern Italy.
This is the first in a series of planned developments by the two firms who aim to take advantage of the increasing shortage of supply of logistics assets in the Italian market, which is expected to deteriorate further in the medium term, as many institutions adopt a wait-and-see approach to development as a result of economic uncertainty.
Designed to meet all modern grade A logistics standards and with the flexibility to accommodate up to four occupiers, the asset will be developed on a 120,000 sqm plot of land in Modugno, the industrial and logistics agglomerate located on the outskirts of Bari, an Adriatic port in the Apulia region. The area is an established logistics hub that is home to many well-known logistics operators, including Amazon, MITSafetrans, STEF, Nippon Express, as well as industrial giants Bridgestone, Bosch, Magna Powertrain, Magneti Marelli and GE Oil&Gas.
The site is also close to Bari city centre, which is a 20 minute drive away and the Bari North toll gate of the A14 highway only 5 minutes away. The catchment area is home to 1.5 million people within a 20 minute drive, increasing to 1.8 million within a 60 minute drive.
Cromwell has received preliminary interest to lease more than three times the expected gross lettable area and expects to have most of the asset let by the start of the construction in the first quarter of 2023.
All future assets in the strategy will be developed to grade A logistics standards incorporating modern technical specifications and will target the LEED Gold certification. Alternative construction techniques and materials will be considered in order to lessen the environmental impact of construction and enable high ongoing energy efficiency, saving occupiers money.
Lorenzo Caroleo, Cromwell’s Head of Italy said: “Given the lack of available logistics and warehouse space in and around Italy’s main cities, we anticipate these modern warehouses will attract large and established Italian and European companies that are active in online and more traditional retail channels.”
“We also believe they will feed into the growing demand for logistics assets created by a trend of onshoring and shortening of supply chains as a result of the disruption caused by the pandemic and increased costs due to surging inflation. We aim to meet this demand by continuing to deploy capital to acquire land to develop more facilities as we build on our current pipeline.”
Fabio Longo, a Managing Director at Bain Capital Special Situations added: “We like to invest in hard-to-access real estate sectors, underpinned by enduring secular trends that drive long-term demand. By partnering with Cromwell, with its experienced on-the-ground Italian team and in-house development capabilities, we have identified a deep dislocation between the supply of modern logistics facilities and the demand from occupiers across the region. We look forward to working with them on this mandate.”