Blackstone has made a late entry into the running to buy Brookfield’s €2bn-plus (£1.8bn) European logistics platform, IDI Gazeley.
Its approach comes even before the private equity giant has completed the sale of its own €12.25bn Logicor platform, with a sale to China Investment Corporation due to complete next month.
The move asserts Blackstone’s belief expressed throughout the Logicor disposal that the buoyant European logistics market still has a long way to run. The firm also has plenty of capital to deploy having held a final close of its €7.8bn Blackstone Real Estate Partners V fund in June, the largest ever European-focused real estate fund.
Final bids for the 17.2m sq ft platform, which also includes nearly 1,000 acres of developable land, are due at the end of next week and a preferred party is expected to be picked shortly after. Bidders have been told that Brookfield will not entertain bids below €2bn.
Blackstone is joined in the running by Global Logistic Properties and Schroders. It is understood that Singaporean state-backed investor Mapletree Investments’ interest has waned, while Canada Pension Plan Investment Board, which briefly considered making an advance, decided not to pursue Gazeley owing to its aggressive pricing.
A purchase of Gazeley by GLP would see it finally establish the foothold in Europe that it has long-craved and it is expected to bid aggressively. The largest warehouse owner in Asia, which bought Blackstone’s US Indcor platform for $8.1bn in 2015, had been in the running to buy Logicor but it has been hampered by its own corporate uncertainty.
Following a review prompted by its largest shareholder GIC, GLP agreed an $11.6bn deal to sell to a Chinese consortium led by Hopu Investment Management and including Hillhouse Capital Group and Vanke in July. However, that deal is not certain to complete before April next year, which may prompt complications with its bid for Gazeley, although it is understood to be aiming to fund its prospective purchase from its own balance sheet.
Schroders’ bid is backed by a trio of large pension fund investors with which it has existing relationships. Following the success of its Schroder Pan European Logistics Fund earlier in the cycle, investors were eager to find new ways to invest with the fund manager in the sector.
CBRE and Morgan Stanley are acting for Brookfield; JLL is acting for GLP.
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