Burstone Group has formed a strategic partnership with Blackstone with the aim of growing its €1.1 billion Pan-European Logistics (PEL) platform.
Blackstone has acquired an 80% stake in Burstone’s existing 1.2m sq m portfolio, which comprises 32 mid-size and big-box logistics properties located around key urban centres in seven European countries, including Germany, France and Netherlands. The portfolio is 97% let to more than 110 tenants, primarily in the third-party logistics sector.
Burstone Group will retain a 20% stake in the portfolio, with the Burstone Europe team, led by managing director Paul Rodger, continuing to manage the portfolio.
The partnership will focus on continuing to capture the current portfolio reversion, while looking to “benefit from what is an attractive entry point in the cycle to acquire primarily mid- and big-box industrial and logistics properties, across core European markets”.
Andrew Wooler, chief executive officer at Burstone Group, said: “The European logistics sector, where we have a market leading team and track record of unlocking value from both income-producing assets and development opportunities, remains one of our key investment themes.
“Despite the impact of the higher rate backdrop, this is a compelling time in the cycle to be in growth mode, with favorable structural drivers – namely nearshoring trends, ongoing supply chain reconfiguration, e-commerce penetration and technological disruption – underpinning very low vacancy rates in our key markets, which is translating into an attractive rental and capital growth outlook.
“This transaction is a continuation of our strategy of partnering with global, best-in-class asset managers who recognise the strength of our local teams and expertise, whilst also offering enhanced access to global institutional capital. It deepens our already strong relationship with Blackstone’s operational and management team, who know our European team well from previous successful collaborations.
“Furthermore, it will enable us to retain a significant investment in Europe, whilst expanding our fund and investment management model, which combines traditional real estate asset yields with additional upside potential from our comprehensive management capabilities.”
James Seppala, head of European real estate at Blackstone, added: “Logistics is one of our highest conviction investment themes globally. This exceptionally well-located portfolio of assets in core logistics markets across Europe is additive to our existing portfolio and allows us to continue to capitalise on customer demand, including as a result of growing e-commerce penetration trends across the continent.”
The transaction is subject to regulatory and shareholder approvals.
