AMB Property Corporation® (NYSE:AMB) has announced the formation of AMB Europe Fund I, FCP-FIS, a Euro-denominated open-end commingled fund that will invest in distribution facilities near high-volume airports, seaports and highway systems, and in the major metropolitan areas of Europe, with current target markets in Belgium, France, Germany, Italy, the Netherlands, Spain, the United Kingdom and Central/Eastern Europe.
The current gross asset value of AMB Europe Fund I is approximately €460 million, which includes approximately €439 million of investments in properties. Total equity committed to the Fund by the initial group of twenty institutional investors is €263 million. AMB's equity commitment of approximately 20%, and a targeted leverage ratio of 60% of the aggregate gross value of the Fund's assets, will permit the Fund to acquire a total of approximately €820 million in assets. Currently, the Fund has total long-term secured debt of approximately €270 million. Because the Fund is open-ended, AMB has committed to make additional investments in the Fund as necessary for AMB to maintain a specified on-going ownership percentage as the size of the Fund increases.
"We entered Europe in 2002 and since then, our on-the-ground team has been actively developing and acquiring highly efficient and strategically located facilities in several of the continent's key markets tied to global trade," commented Hamid R. Moghadam, AMB's chairman and CEO. AMB's Europe portfolio totals approximately 720,000 m² of operating and development facilities. The company's Europe team comprised of development, acquisitions, customer development, property operations and portfolio management professionals is based in Amsterdam, Frankfurt and Paris. "The size of AMB Europe Fund I and the positive response from institutional investors reflect the significant opportunities presented by the dynamic and expanding distribution markets of Europe."
The investment focus of the Fund is to acquire stabilized industrial distribution properties, including those developed by AMB. At closing, the Fund owned 38 distribution facilities totaling approximately 439,000 m² that had previously been acquired or developed by AMB. AMB's current development pipeline in Europe includes an additional 281,000 m² that is expected to be contributed to the Fund upon stabilization.
"The success in the U.S. of AMB Institutional Alliance Fund III's open-end structure supports our decision to use this approach for AMB Europe Fund I. AMB continues to meet private capital demand for co-investment opportunities that capitalize on the long-term growth of global trade," commented John T. Roberts, Jr., president of AMB Capital Partners.
As investment manager of the Fund, and consistent with its existing co-investment fund structures, AMB will receive acquisition fees on future acquisitions and fees for asset and portfolio management services. Every three years, AMB has the ability to receive additional incentive distributions if it exceeds certain internal rate of return benchmarks.