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Blackstone has acquired another large warehouse portfolio, in a €1bn transaction, adding to the US investment group’s bet on the logistics sector with one of Europe’s largest property deals this year.
Johannesburg-listed landlord Burstone — formerly called Investec Property Fund — announced on Monday it had agreed to sell an 80 per cent stake in its roughly €1bn European logistics portfolio, spanning properties in Germany, France and the Netherlands.
Blackstone has been investing in warehousing space in recent years on the back of a boom in ecommerce, building a vast portfolio of UK and European logistics assets through a steady stream of smaller purchases and a number of major deals.
“Logistics is one of our highest conviction investment themes globally,” said James Seppala, head of European real estate at Blackstone. He said the Burstone portfolio was “exceptionally well-located”, adding that the sector was benefiting from “growing ecommerce penetration trends across the continent”.
The transaction is another sign that dealmaking is starting to return to the commercial property sector after a brutal two-year downturn caused by high borrowing costs. It comes after Segro, the UK’s largest listed logistics landlord, raised around £900mn of fresh equity in February to invest in more warehouse space and make acquisitions as the market recovers.
European logistics properties have suffered smaller price declines than other commercial real estate sectors during the downturn, and have started to recover faster.
Asset values in the industrial sector, which includes logistics, have lost 22 per cent since the peak of the market in 2022, according to a Green Street index, but gained almost 1 per cent in the year to June — a better recovery than other property types.
Last year, Blackstone acquired UK landlord Industrials REIT for £700mn, a specialist in so-called “last mile” properties close to city centres. In 2021, it took private St Modwen’s for £1.3bn.
The US private capital group has since announced plans to combine the Industrials REIT and St Modwen’s logistics portfolios into a new company called Indurent. The integration of the two businesses means an eventual sale of that portfolio is likely at least 12-18 months away.
Blackstone has also since 2019 amassed a huge “last mile” logistic portfolio under the brand Mileway, focused on the last step of the delivery process.
Burstone will remain the manager of the portfolio as part of Monday’s transaction, owning a 20 per cent stake. Their 1.2mn sq m portfolio, which includes large out-of-town sheds known as “big boxes” and smaller urban sites, is 97 per cent occupied, the company said. Blackstone will acquire the portfolio at a slight discount to the properties’ valuation.
Andrew Wooler, Burstone chief executive, said the deal “deepens our already strong relationship with Blackstone’s operational and management team, who know our European team well from previous successful collaborations”.
