Sale-leaseback examples by W. P. Carey (WPC) – Case Study for Real Estate Financing: Danske Fragtmænd 1

Acquisition of existing lease and follow-on investment

W. P. Carey provides exit strategy for institutional investor and follow-on capital to support tenant’s expansion plans 

Danske Fragtmænd

Description: With a history dating back more than 100 years, Danske Fragtmænd is the leading freight carrier for business-to-business freight solutions in Denmark. It holds a dominant market share of approximately 50% in its segment, twice the size of its nearest competitor, with approximately 40,000 customers and nine million annual consignments.

Total Investment: $199 million (includes $188 million initial investment and $10.5 million follow-on acquisition)

Transaction Type: Acquisition of existing net lease*

Location: Denmark

Square Footage: 2 million square feet

Facility Type: 15 logistics assets and one corporate HQ

In 2018, W. P. Carey acquired a portfolio of 14 logistics assets and one corporate headquarters located across Denmark for $188 million. The portfolio is leased to Danske Fragtmænd, the leading Danish freight carrier for B2B freight solutions, and represents approximately 90% of the company’s logistics footprint. In addition, in 2019, W. P. Carey made a capital commitment to fund a last-mile logistics facility completed in 2020. Proceeds from the initial acquisition funded an exit strategy for an institutional investor following a shift in their portfolio’s geographic focus. Proceeds in both transactions helped fund the tenant’s plans to expand its market share across Denmark. 

This deal marked W. P. Carey's first investment in Denmark and complements the firm's existing Nordic portfolio. W. P. Carey has been investing in the Nordics since 2001 and has acquired over $1 billion (€800 million) of assets in the region, including assets in Finland, Sweden and Norway.

"We are pleased to have W. P. Carey as our landlord and long-term partner. We look forward to working together in the future as Danske Fragtmænd seeks to expand its market share across Denmark."

Jørn P. Skov, CEO, Danske Fragtmænd
 

 

*In an acquisition of an existing lease, W. P. Carey will acquire a single-tenant property subject to an existing net lease. This type of transaction enables the previous property owner to achieve a number of different objectives depending on their needs. For example, exit a property that no longer fits its strategy, liquidate a finite-life fund or generate proceeds to invest in new properties or for M&A activity.