Real estate deal with signal effect for the supply chain in the food sector

May 2019 – There is much more to the sale of the Dutch logistics park ABC Westland to the US real estate investor Hines than a successful real estate transaction. Above all, the deal is proof of the reorganisation of the global food market: the supply chains are being re-established, freshness and speed are what count. The experts at Hamburg Commercial Bank, with their in-depth expertise in the food industry and real estate, are in double demand as solution providers.

117,000 square metres or almost twelve football pitches: At ABC Westland's huge logistics park in the Netherlands, everything revolves around agricultural products and food. Cucumbers or tomatoes from the Westland region, Europe's largest vegetable growing region, are stored, packed and distributed there. But Rotterdam, as the largest deep-water port in Europe and one of the largest seaports in the world, is only a few minutes away from the logistics park by truck. In the Giga port, the bellies of the large container ships are emptied every minute, landing there from overseas with bananas, mangos or kiwis for the European market. Or the ships that bring pork from the nearby Münsterland to all corners of the world are filled.

© ABC Westland –  117,000 square metres or almost twelve football pitches: ABC Westland's huge logistics park in the Netherlands

Fresh segment flourishes

After all, people always eat. And at the request of consumers in the industrial nations, it is becoming ever fresher and more bite-sized in the form of ready-to-go portions in supermarket refrigerated shelves. In the middle of last year, researchers from the EHI Retail Institute based in Cologne and experts from Hamburg Commercial Bank conducted a joint study of the significance of the fresh food segment for the German food industry in terms of business and the economy. A central finding of the study entitled " Food Retail. Freshness makes all the difference - can trade deliver? Fresh products account for almost half of the profits of German food retailers. According to the study, the fresh food segment accounts for 38.7 percent of the turnover of all German food markets, but at the same time accounts for 49 percent of gross profit. This means that apples, pears, fish and meat are essential yield pearls at Edeka, Rewe, Aldi and Co.

“The food market is currently undergoing a reorganization.”

Karsten Maschler, Head of M & A at Hamburg Commercial Bank

"The food market is currently undergoing a reorganization," says Karsten Maschler. "The quality of the supply chain is becoming an increasingly important criterion for success," adds the Head of M&A at Hamburg Commercial Bank. The dynamism of the industry is also attracting new players to the market for the necessary specialist logistics centres. As in the case of ABC Westland and real estate investor Hines from Houston, Texas. Maschler is proud that he and his team, as German bankers, were able to ensure the solidarity between the Dutch logistics park operator and the investor from the USA. "We are primarily a solution provider with a deep understanding of the issues, concerns and challenges of highly specialized industries. In this case, even double industry knowledge was required: for the food market and the real estate market," says Maschler. The offer convinced - especially the shareholders of ABC Westland absolutely wanted the bank from Germany to be on board. "With the Hamburg Commercial Bank we found the ideal partner for our strategic considerations. The M&A team is very experienced with international transactions of this kind and has provided us with highly professional support," says Aad van der Windt, shareholder of ABC Westland. In addition, there is an important psychological aspect: the bank from Germany explicitly speaks the language of medium-sized businesses. With around 130 transactions to date, Hamburg Commercial Bank is one of the established and sought-after advisors for corporate acquisitions and transfers of businesses, particularly in the SME sector.

Successful succession planning

Through the transaction with Hines, the previous owners of ABC Westland are now regulating the safe succession of their park at an early stage. "The development of different exit strategies was extremely important to me because the future of ABC Westland is very important to me. This can only be done with the right partner and the right solution. Hines offers excellent prospects and the success story of the logistics park can now be continued," van der Windt is convinced. The transaction is the second largest single asset deal in the Dutch logistics market for many years.

“The development of different exit strategies was extremely important to me because the future of ABC Westland is very important to me.”

Aad van der Windt, co-owner of ABC Westland

In the European food logistics market, Hines seems to have got into the taste. Only in October 2018 did the investment company take over Fresh Park Venlo in the south of the Netherlands. It is quite possible that a new success cluster will emerge in the Texan portfolio. Hines currently manages real estate assets worth around 120 billion US dollars and is present in 214 cities and 24 countries around the world.

"This transaction impressively demonstrates the dynamism of the logistics market in our neighbouring country, the Netherlands. But in Germany, too, a great deal is currently being invested in fresh produce logistics, which offers good opportunities for broad-based food companies. We are closely linked to the real estate and logistics sector and will support further consolidation," says Karsten Maschler, looking ahead at the future.