Blackstone has reprised one of its favourite investment themes with the acquisition of a European logistics portfolio from Australia’s Macquarie Capital Principal Finance and Singapore-based Elite Partners Capital for €520 million ($586 million).
The US private equity titan picked up the collection of 12 logistics and industrial assets on behalf of its Blackstone European Property Income Fund, Macquarie said Tuesday in a release.
The portfolio was assembled by Elite and Macquarie Capital through nine independent transactions under Elite Logistics Fund I, which only last year closed on €150 million in capital commitments and sought to tap investment opportunities in the UK and the EU as e-commerce boomed.
“Macquarie Capital Principal Finance has been an invaluable strategic and capital partner to us,” said Enoch Tan, portfolio director of Elite Logistics Fund I. “We were able to leverage off their deep European network and strong balance sheet to acquire our desired assets within a short period of time, despite the challenges posed to us by the COVID-19 pandemic in Europe over the past two years.”
Vehicle Devours Fund
Elite Logistics Fund I has invested in as many as 18 logistics assets across Poland, Germany, Spain, Czechia and Britain. The pan-European vehicle’s assets under management totalled €400 million as of the closing date in mid-2020.
Mingtiandi reported in March 2020 that the fund had achieved a first closing near the hard cap of €150 million and had acquired 4 million square feet (371,612 square metres) of logistics space in Poland and the UK. The portfolio’s other holdings have included a 629,700 square foot warehouse near Warsaw acquired from Singapore sovereign wealth fund GIC for €30 million, two DHL facilities in Germany and the Skyport Cargo Terminal at Prague’s international airport.
An Elite representative said at the time of the first closing that the private equity firm was already exploring the option of spinning off assets from the fund in late 2020 or in 2021, perhaps into a REIT, but Blackstone’s private fund ultimately provided the exit ramp.
Aside from its newly added industrial portfolio, Blackstone European Property Income Fund owns the 202,000 square metre (2,174,310 square foot) Proximity Logistics Portfolio across France and Germany, the 22,000 square metre Ilot Panhard office hub at a former car manufacturing site in Paris, and the 25,845 square metre 6-9 Harbour Exchange, a data centre and office complex in London’s Canary Wharf.
The recently launched fund, which is open to individual investors, allocated 63 percent of gross asset value to the logistics segment as of September, according to Blackstone.
Hooked on Sheds
Alexi Antolovich, global co-head of real estate at Macquarie Capital, hinted at further logistics investments alongside four-year-old Elite Partners Capital, which also sponsors a UK-focused commercial REIT listed on the Singapore Exchange.
“We look forward to continuing our relationship with Elite through Fund II,” Antolovich said in an apparent reference to the next edition of the Elite Logistics Fund series.
For Blackstone, which has made a regular habit of big warehouse buys, the Elite deal comes less than two weeks after agreeing to acquire a 49 percent stake in Dexus Australia Logistics Trust from GIC, with the private vehicle reported to be worth A$3.5 billion ($2.5 billion).
The Manhattan-based firm chaired by billionaire founder Steve Schwarzman has deployed much of its cash cache this year into industrial assets in Asia, particularly in India, where it has been a pioneer in the country’s roll-out of REITs.
In September, the firm completed the $40 million purchase of a North Delhi warehouse from local developer TARC, with that deal following just a few months after Blackstone had bought out Warburg Pincus’s Embassy Industrial Parks joint venture in a deal reportedly valued at $700 million.
The fund manager has also stuck with industrial in Hong Kong, buying a workshop in the city’s Fanling area for $36 million in July to form part of an emerging data centre hub. That New Territories pickup came after Blackstone had purchased a Kowloon industrial tower for $65 million in April.