European Core-Plus Logistics Fund Launch in Luxembourg: Best Investment Structures explained

European logistics real estate continues to benefit from the growth of e-commerce, supply chain reconfiguration, near-shoring of inventories, and the need for energy-efficient warehouses. For professional investors, family offices, and institutional managers, a European Core-Plus Logistics Fund structured in Luxembourg offers a scalable way to access these trends while maintaining governance, tax efficiency, and cross-border deployment capacity.

We explain how to launch a European Core-Plus Logistics Fund in Luxembourg and how to select the best investment structures for the strategy. It considers the role of a MASTER FUND SICAV-RAIF, multicompartment RAIFs, SIFs, and Special Limited Partnerships (SCSp). In addition, we highlight governance, regulatory, and tax aspects that matter to institutional investors and sponsors.

1. What is a European Core-Plus Logistics Fund?

A European Core-Plus Logistics Fund focuses on income-producing logistics assets across Europe, with controlled exposure to leasing and asset management upside. It typically invests in:

• Distribution centers, regional hubs, and last-mile warehouses near major cities and transport corridors.
• Modern or upgradable assets that can meet tenant ESG requirements after targeted capex.
• Portfolios where lease maturities, rental reversion, and energy upgrades can generate extra value.

Core-Plus sits between core and value-add. Compared with pure core, the fund accepts moderate vacancy, shorter leases, or capex plans in exchange for a higher yield. Compared with value-add, it maintains a strong focus on stabilised income and disciplined leverage.

In practice, sponsors often target net annual yields in the 4.0% to 6.0% range and IRR expectations around 7.0% to 11.0%, depending on country mix, leverage, and execution. These figures are indicative and not a guarantee. But, they explain why logistics has become a strategic allocation for pension funds, insurers, sovereigns, and sophisticated family offices.

2. Why structure a Core-Plus Logistics Fund in Luxembourg?

Luxembourg has become the default jurisdiction for cross-border European real estate platforms, particularly in alternatives. For a European Core-Plus Logistics Fund, several features are decisive:

• AIFMD passporting: a Luxembourg-domiciled fund managed by an authorised AIFM can be marketed to professional investors across the EEA using a passport regime.
• Flexible regimes: sponsors choose between regulated and semi-regulated vehicles, including RAIF, SIF, SICAV-RAIF, and SCSp structures tailored to their investor base.
• Multicompartment tools: a SICAV-RAIF can host multiple compartments for different risk profiles, geographies, or leverage strategies under one umbrella.
• Tax neutrality at fund level (subject to proper structuring): the fund is typically designed as a tax-neutral holding layer between investors and local SPVs.
• Experienced ecosystem: Luxembourg offers deep pools of AIFMs, administrators, depositaries, auditors, and legal advisers specialised in logistics and real estate.

For investors, these features translate into predictable governance, high-quality reporting, and the ability to hold diversified portfolios of logistics assets across multiple European jurisdictions through one Luxembourg platform.

3. The role of a MASTER FUND SICAV-RAIF for European logistics

A MASTER FUND SICAV-RAIF combines the corporate form of a SICAV with the flexibility of the RAIF regime and is particularly suited for a pan-European core-plus logistics strategy. The corporate purpose typically allows the fund to acquire, hold, manage, enhance, and divest a portfolio of European real estate and real estate-related assets in the logistics sector.

In a core-plus logistics context, a MASTER FUND SICAV-RAIF can:

• Raise capital from professional and well-informed investors via different share classes or feeders.
• Invest via local SPVs into warehouses and logistics parks in multiple European countries.
• Host several compartments for distinct strategies, such as German last-mile, pan-European big-box, or ESG-upgrade portfolios.
• Provide a central platform that feeds separate co-investment vehicles or club deals for large assets.

Because a RAIF is not directly supervised by the CSSF but must appoint an external AIFM, setup times are often shorter than for fully regulated funds, which is attractive for sponsors who wish to move quickly when logistics opportunities arise.

4. Comparing key Luxembourg structures for a logistics fund

When launching a European Core-Plus Logistics Fund, sponsors will generally consider four main structuring options:

• SICAV-RAIF (MASTER FUND SICAV-RAIF): frequently the first choice for institutional programs, with umbrella and multicompartment features, external AIFM oversight, and tax-efficient real estate strategies.
• Standalone RAIF in partnership form (SCSp-RAIF): a Special Limited Partnership under the RAIF regime offering a flexible partnership-style vehicle with investors as limited partners.
• SIF (Specialised Investment Fund): a more regulated alternative under existing rules, sometimes preferred by conservative investors but with longer setup times and more intensive regulatory interaction.
• Unregulated SCSp combined with an AIFM: used for club deals or when investors favour a pure partnership model with contractual flexibility, while relying on an AIFM for regulatory compliance.

The choice between these structures depends on investor expectations, regulatory preferences, distribution strategy, and time-to-market. For many core-plus logistics strategies, the MASTER FUND SICAV-RAIF structure is used as the flagship vehicle, complemented by co-investment SCSp structures for specific deals.

5. Master–feeder and compartment architecture for logistics investors

A European Core-Plus Logistics Fund in Luxembourg can use a master–feeder and multicompartment architecture to align with different investor needs:

• Master fund: the MASTER FUND SICAV-RAIF holds all logistics assets and SPVs and defines the investment policy at portfolio level.
• Feeder funds: separate feeders for different investor groups, such as euro investors, dollar investors, or particular jurisdictions, feeding into the same master compartment.
• Compartments: each compartment can focus on a specific strategy (for example, pan-European core-plus logistics, development logistics, or value-add repositioning).
• Co-investment sleeves: selected investors can take additional exposure to single assets via SCSp or other vehicles that invest alongside the master fund.

This architecture allows sponsors to scale a logistics platform while keeping risk and governance centralised at the master level, and offering tailored access points for different institutional profiles.

6. Governance, AIFM and risk management for a core-plus logistics strategy

A European Core-Plus Logistics Fund must demonstrate robust governance and risk management, which is a key expectation for institutional capital. In a RAIF or SICAV-RAIF context:

• An external AIFM is mandatory and is responsible for portfolio management and risk management, within a documented investment policy.
• A depositary bank safeguards assets, monitors cash flows, and oversees certain operations.
• Valuation policies must be clearly defined, often relying on independent valuation experts for real estate assets at least annually, and more frequently for reporting purposes.
• Leverage levels, liquidity terms, and concentration limits are monitored and reported according to AIFMD and investor agreements.

For a core-plus logistics strategy, risk management typically focuses on tenant diversification, lease maturity profiles, geographic concentration, development exposure, and interest rate risk. Scenario analysis and stress testing are central to institutional-grade risk reporting.

7. Tax and SPV structuring aspects 

A Luxembourg logistics fund will generally invest through local SPVs in jurisdictions such as Germany, France, the Netherlands, Spain, Italy, or selected CEE markets. At a high level:

• The Luxembourg fund is usually designed to be tax neutral at fund level, subject to the chosen regime and proper structuring.
• Local SPVs are established according to the tax and regulatory framework of each country, typically as property companies or holding entities.
• Financing may combine equity and shareholder loans, together with external bank debt or private lenders, taking into account thin-capitalisation and interest deduction limitations.
• Distributions to investors are structured to minimise friction, always subject to investor-specific tax advice and local rules.

Because cross-border tax rules are complex and rapidly evolving, sponsors and investors should work with tax advisers in each relevant jurisdiction to align the logistics fund structure with their risk and return objectives.

8. Key features and benefits of a Luxembourg European Core-Plus Logistics Fund

A European Core-Plus Logistics Fund launched in Luxembourg can offer a combination of structural features and investor benefits:

• Pan-European reach: one platform to invest in logistics assets across multiple European countries through local SPVs.
• Institutional governance: AIFM oversight, independent depositary, and robust risk and valuation frameworks.
• Flexible investor access: master–feeder and multicompartment options to accommodate different investor profiles and currencies.
• Core-plus risk/return balance: exposure to stable logistics income with controlled asset management upside.
• ESG alignment: possibility to integrate energy-efficiency upgrades, green leases, and sustainability reporting at asset and fund level.
• Scalability: the structure can grow from an initial seed portfolio to a multi-billion platform as new compartments and feeders are added.

These features make Luxembourg a natural choice for sponsors planning to raise capital from international institutional investors for a European logistics strategy.

9. How to choose the best Luxembourg structure for your European Core-Plus Logistics Fund

Selecting the right structure is a strategic decision. A practical way to approach this is to follow a sequence of clearly defined steps:

1. Define the core-plus logistics investment strategy.
   Clarify target regions, asset types, tenant profiles, ESG priorities, leverage limits, and hold period expectations for the European Core-Plus Logistics Fund.
2. Profile the investor base and typical ticket sizes.
   Identify whether the fund will mainly address pension funds, insurers, sovereigns, or family offices, and map expected commitments per investor.
3. Assess eligibility for RAIF, SICAV-RAIF, SIF, or SCSp.
   Compare regulatory requirements, governance models, time-to-market, and investor preferences for each structure. You may focus on the MASTER FUND SICAV-RAIF option for pan-European deployment.
4. Model fund-level cash flows and tax leakage.
   Run scenarios across the targeted jurisdictions to estimate net yields and IRR after fund-level and SPV-level taxation, financing costs, and fees.
5. Select the preferred structure and service provider stack.
   Damalion helps you to choose the optimal Luxembourg vehicle, appoint the AIFM, depositary, administrator, and key advisers. Then, you have a concise term sheet to present to anchor investors.

The right structuring helps sponsors to articulate the value proposition of their logistics strategy. It brings answers to due diligence questions, align legal, tax, and operational design before launch.

In practice, a European Core-Plus Logistics Fund launched in Luxembourg can become a long-term platform for institutional capital seeking exposure to structural supply chain trends. The right combination of vehicle type, governance model, and local SPV structuring is essential to delivering sustainable performance while maintaining regulatory and tax compliance across jurisdictions.

Damalion experts support sponsors and investors to align fund structuring, AIFM governance, cross-border banking, and tax considerations.  If you plan to set up or scale your logistics platform, please contact your Damalion experts now.