Log sees the warehouse market booming and plans to invest up to R$900 million in 2024

Log Commercial Properties, a logistics warehouse company controlled by the Menin family, plans to build 500,000 square meters (m²) of gross leasable area (GLA) in 2024, a record in the company’s history.

To achieve this, the planned investments are up to R$900 million, which will be financed by recycling assets, a strategy that the company uses to maintain growth and avoid getting into debt.

“These new warehouses will be built in the South, Southeast, Central-West and Northeast”, says Sergio Fischer, CEO of Log, to NeoFeed. “We will be present in several squares.”

In the first quarter of this year, Log built 57 thousand square meters of GLA. The average ticket price for these assets reached R$23.63 per m² of GLA and they were delivered 100% pre-leased. “In the second quarter it will be more than double that,” says Fischer.

At the same time, Log’s strategy is to remain active in recycling assets, which accumulated more than R$1.7 billion in sales in the last 12 months, a way of keeping its debt, at around R$740 million, stable . Today, this represents 2.6 times Ebitda.

In April this year, Log concluded the sales of two logistics warehouses in Betim and Salvador, which together have 138 thousand m² of GLA. The value of the transaction was R$509.7 million, which represents 56% of the investments that Log plans throughout 2024. The buyer was a real estate fund from BTG Pactual, BTLC11.

The asset recycling strategy also helps finance the new warehouses. According to Fisher, for every 1 m² of GLA sold, Log builds 1.5 m² of GLA.

Log’s CEO sees the scenario warming for more sales, as interest rates decline. “When this happens, there will be a flood of resources from real estate funds and there will be a lack of assets to sell,” says Fischer.

At the same time, demand for logistics warehouses remains high. Fischer says that Log operates in several sectors and that none of them represents more than 20%.

In the first quarter of 2024, the vacancy level was 0.91%, well below the market average of 10%. As a result, the company obtained a net profit of R$55.3 million, an increase of 90.1% compared to the same period last year. EBITDA of R$74 million grew 36.4%.

The company is also preparing for its next phase. Between 2025 and 2028, the plan is to build 2 million m² of GLA. O capex per year, during this period, should be in the order of R$ 900 million.

Log is valued at R$2.15 billion. In 2024, shares rise 1.5%. In 12 months, the increase is more than 30%.