LOG sells BRL 425 million in sheds to HGLG11

LOG Commercial Properties has just raised BRL 425 million with the sale of 150,000 m² of warehouses to HGLG11, the logistics real estate fund managed by Credit Suisse.

The sale is part of LOG’s strategy to recycle capital to finance its plan to build 1.5 million square meters of warehouses between 2020 and 2024 and comes at a time when debt is expensive and equity, depreciated. LOG’s share dropped 25% in the year and 37% in 12 months.

This strategic plan has a capex estimated at R$3.5 billion and, with today’s sale, LOG has already raised R$1 billion from the sale of assets at an average margin of 40%.

One of the warehouses object of the transaction – LOG Betim II – will be delivered in the third quarter and is already leased to a major ecommerce player. The other, Parque Torino, in which LOG held a 40% stake, was completed in December 2021 and is 99% leased.

“Even with the increase in construction costs and the rise in the Selic, well-located assets continue to be in demand,” CEO Sérgio Fischer told the Brazil Journal.

Today’s sale is coming out at a gross margin of 32.6% (the difference between the yield of development and the cap rate about to leave).

LOG’s biggest sale so far was a R$300 million transaction in May 2021, which came out with a gross margin of 44%.

Today’s sale comes at a time when the company is going through a record year – both in capex and in the delivery of warehouses (400,000 square meters) – and idleness is at historic lows.

LOG reports its second quarter tomorrow.

HGLG11 will pay 70% on the closing date and the balance in two installments within 18 months after the closing date. closing.

The FII will finance the acquisition with the funds raised in a quota issue concluded in May, when HGLG11 raised R$335 million.

Source: Brazil Journal