Blackstone and M7 Real Estate have bought almost the entire European portfolio of Hansteen for €1.3bn (£1.1bn), more than half of the REIT’s assets under management, EG can reveal.
The industrial portfolio is located in Germany and the Netherlands and totals around 25m sq ft across close to 180 assets. As of 30 June last year Hansteen’s European portfolio made up 69.4% of its total assets and was valued at £1bn. Based upon these figures in its most recent half year results it leaves the company with £463.1m of assets in the UK.
The deal is a landmark for the joint venture between private equity giant Blackstone and investor and fund manager M7 that is steadily building a substantial presence in the light industrial market. The focus on the sector is in part due to its potential future value enhancement as a result of the rapid growth in last mile delivery, driven by e-commerce.
In January EG revealed that the pair had undertaken their first deal and were looking into establishing a substantial platform. This kicked off with Blackstone buying €112.5m of French assets from a joint venture M7 had previously managed for Starwood Capital. It is thought that the jv could look to buy out more of the vehicles that M7 manages for other investors.
The Blackstone/M7 portfolio so far
| Portfolio name | Seller | Price (€m) | Assets |
|---|---|---|---|
| TEIF/MStar Europe II | Starwood Capital/M7 jv | 112.5 | 26 assets totalling 1.8m sq ft, mostly around Paris |
| Hansteen’s Dutch assets/Onyx | Hansteen | 302.4 | 71 assets totalling 7.4m sq ft |
| Hansteen’s German assets/Onyx | Hansteen | 974.3 | 100 assets totalling 16.8m sq ft |
| DaRE | Oaktree Capital/M7 jv | c. 130 | 25 assets in Denmark totalling 3.7m sq ft |
| MBay | HIG Capital/M7 jv | c. 120 | 27 Dutch assets totalling 3m sq ft |
| Total | c. €1.6bn | c249 assets totalling 32.7m sq ft |
Blackstone is currently investing funds in Europe from its $15.8bn Blackstone Real Estate Partners VIII fund, the largest ever global real estate fund raised in 2015, and its Blackstone Real Estate Partners Europe V, which held a €5.5bn first close last June.
M7 has built its portfolio to €2.4bn of assets under management totalling 45m sq ft in 13 countries since it was established in 2009. It has 23 operating mandates and in 2015 formed a strategic alliance with a Hong Kong-based family, understood to be the Kwoks.
CBRE acted for Blackstone and M7. JLL and Jones Day acted for Hansteen. Eastdil Secured has been advising on the formation of the Blackstone/M7 joint venture.
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