Blackstone Acquires 16 UK Logistics Assets

By Keith Loria, Contributing Editor

Charlie Howard, Logicor

Blackstone Real Estate Partners Europe IV, through its European logistics arm Logicor, has acquired a logistic portfolio consisting of 16 U.K.-based warehouse properties, from a joint venture between funds managed by Oaktree Capital Management, L.P. and Anglesea Capital, for what sources say was $607 million.

The 16-property portfolio totals 6-million square feet in all, with warehouses located in core logistics markets close to major urban centers across the U.K., including Birmingham, Leeds and Oxford.

“This transaction was a unique opportunity to acquire a substantial, high-quality portfolio in one of Europe’s largest and most important logistics markets,” Charlie Howard, Logicor’s managing director, U.K., said in a company release. “This transaction enhances our relationships with a number of important customers and strengthens our overall position as a leading owner and operator of logistics warehouses.”

Among the tenants in the 16 properties are Arcadia, B&Q, The Co-Operative, Debenhams and Unipart.

The deal follows recent Logicor acquisitions in Germany and Portugal, as well as acquisitions in France and Spain as part of the GE portfolio Blackstone agreed to acquire earlier this month.  Last July, Logicor acquired 18 logistics facilities in eight European countries in a $375 million deal. Overall, the company now owns 21 million square feet of logistics space in London.

A recent report from Deutsche Asset Wealth Management predicted logistics properties would be the top-performing real-estate sector in Europe over the next five years, following a 2014 that saw nearly $27 billion in European industrial properties.

“We still expect logistics to be the best performing sector over the next five years, boosted by income returns of 150 to 200 basis points higher than the other sectors,” the report said. “The average spread between logistics yields and high street retail yields, for example, fell to around 180 basis points in 2007 but has since risen to over 250 basis points. This is mostly justified by much weaker rental growth prospects in the logistics sector, but this additional spread allows for greater potential for yield compression, while serving as a buffer to absorb more of the expected future bond rate rise.”