H.I.G. Capital bets on French logistics amid last-mile delivery boom

Private equity group strengthens European presence as investors rush to secure prime delivery infrastructure

H.I.G. Capital has acquired four French logistics facilities in a move that underscores private equity’s growing appetite for last-mile delivery assets, as investors seek to capitalise on the transformation of retail distribution networks.

The Miami-based investment group, which manages $66bn in capital, has secured facilities in Toulouse, Bordeaux, Caen and Rennes, all fully let to blue-chip tenants including Amazon, XPO and Kuehne+Nagel. The deal value was not disclosed.

The transaction highlights the increasing institutional interest in logistics infrastructure, particularly assets serving the crucial “last mile” of delivery networks. Research indicates that 25 per cent of consumers now abandon retailers whose deliveries exceed three and a half days, creating pressure for sophisticated distribution networks.

“The positive supply-demand imbalance in these submarkets will continue to drive rental growth,” said Jérôme Fouillé, managing director at H.I.G. Realty Europe, pointing to the structural shortage of modern logistics facilities in key French metropolitan areas.

The deal comes as investors increasingly view last-mile logistics as critical infrastructure rather than conventional real estate. The final leg of delivery represents the most capital-intensive portion of the supply chain, with retailers and logistics operators competing for facilities that can support rapid fulfilment.

Amazon has set an aggressive benchmark for the sector, achieving delivery speeds more than twice the industry average across its US operations. Traditional logistics groups face mounting pressure to match these capabilities, driving demand for strategically located facilities.

H.I.G.’s latest acquisition reflects several structural shifts in the European logistics market. Urban congestion and restricted development opportunities have created scarcity value for well-positioned assets, while evolving consumer expectations have transformed delivery speed from a luxury into a competitive necessity.

The transaction adds to H.I.G.’s existing portfolio of more than 400 investments since its 1993 founding. The group’s current holdings comprise over 100 companies generating combined sales above $53bn.

Industry analysts note that successful last-mile operations increasingly depend on access to prime infrastructure. “The economics of rapid delivery require sophisticated networks of urban facilities,” said one sector specialist. “Control of these assets has become a key determinant of competitive advantage.”

The French market presents particular strategic value due to its combination of dense metropolitan areas and extensive rural regions. Assets capable of serving both environments efficiently have attracted premium valuations from investors seeking defensive positions in the evolving retail landscape.

However, the sector faces challenges. Environmental regulations and sustainability requirements add complexity to facility operations, while urban congestion continues to complicate delivery economics. Rural areas present additional difficulties, with operators struggling to achieve profitable rapid delivery across dispersed populations.

Despite these headwinds, institutional investment in logistics infrastructure shows little sign of slowing. The sector’s resilience during recent market volatility has reinforced its appeal to investors seeking stable returns backed by structural growth trends.

The consolidation of logistics assets under institutional ownership raises questions about market dynamics. As control of critical infrastructure concentrates among fewer players, implications for retail competition and market access remain unclear.

For H.I.G., the acquisition represents another step in building a pan-European logistics platform. As consumer expectations continue to evolve and e-commerce penetration grows, the strategic value of well-positioned last-mile facilities appears set to increase further.

Markets Insight

The rush for logistics assets reflects broader shifts in institutional portfolios. As traditional real estate sectors face upheaval from changing work and shopping patterns, investors have pivoted toward infrastructure supporting the digital economy.

Last-mile delivery facilities represent a particularly attractive proposition, combining the defensive characteristics of infrastructure with exposure to e-commerce growth. The scarcity of prime assets has supported valuations despite wider market uncertainty.

Success in the sector increasingly depends on sophisticated operator relationships and deep market knowledge. Assets must be positioned to serve evolving delivery models while maintaining flexibility for future adaptation.

As institutional capital continues to flow into the sector, competition for prime assets will likely intensify further. The winners in this market may be those who can build scaled platforms capable of supporting next-generation delivery networks.

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