W. P. Carey Inc. WPC announced the acquisition of a logistics facility in Oskarshamn, Sweden for around $26 million (SEK 216 million). This facility is net-leased to commercial vehicles manufacturer – Scania AB. The move enables the company to enhance its portfolio with a long-term CPI-indexed net-leased asset.
The acquisition seems to be a strategic fit, as it offers an opportunity to enhance the company’s tenant roaster with a well-established customer like Scania. Founded in 1900, Scania is wholly owned by German automotive group Volkswagen AG, and is rated A- by Standard & Poor's. It has a presence in more than 100 countries.
Notably, this newly constructed class-A building was purpose-built for Scania and is strategically located on the major highway route that connects Stockholm, Oskarshamn and Malmö to mainland Europe. This logistics facility caters to Scania’s Oskarshamn manufacuting plant.
Also, this acquisition will likely ensure a steady source of revenue for W. P. Carey. This is because the facility is net-leased on a long-term basis with around 15 years remaining and the lease incorporates annual CPI-based rent escalations. Hence, going forward, we believe this Nordic acquisition in an attractive logistics route would add much long-term value to W. P. Carey’s portfolio.
W. P. Carey, which is a real estate investment trust (“REIT”) focusing on corporate sale-leaseback financing, build-to-suit construction financing and single-tenant net lease properties acquisition, currently carries a Zacks Rank #3 (Hold).
Investors interested in the REIT industry may consider stocks like Extra Space Storage Inc. EXR, First Industrial Realty Trust Inc. FR and Prologis, Inc. PLD. All these stocks have a Zacks Rank #2 (Buy).
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