Blackstone Group LP is set to acquire US industrial warehouse assets from GLP, a Singapore-based logistics provider. The deal is worth $18.7 billion (£14.8 billion) making it the largest private real estate transaction. The world’s biggest manager of alternative assets, Blackstone, said on June 2 that the overall transaction totaled 179 million square feet of urban logistics assets. That nearly doubles the size of the company’s US industrial footprint.
This deal comes in an era when global investors are spending billions of dollars to buy logistics assets as a rise in e-commerce activity increases demand for warehouse and delivery services. The global co-head of Blackstone Real Estate, Ken Caplan, explained that logistics is the company’s highest conviction global investment theme currently. Thus, the company looks forward to enhancing its existing portfolio to ensure that they meet the thriving e-commerce demand.
GLP has several large e-commerce platforms clients that include JD.com Inc and Amazon.com Inc. Other clients include the consumer brands L’Oreal SA and Adidas AG. In the past four years, GLP scaled up its American business. That made it the second-biggest in the sector behind Prologis Inc.
The latest transaction happens two years after large Chinese private equity consortium backed by senior GLP executives won a bid to buy GLP for around $16 billion (£9.3 billion). GLP is a global investment manager established in Singapore. The company has $64 billion of assets under management in private equity funds and real estate funds.
The company’s real estate fund platform ranks among the biggest in the world spanning approximately 785 million square feet. Blackstone agreed to acquire assets from three of GLP’s US funds as part of the $18.7 billion enterprise deal. Blackstone Real Estate’s global opportunistic BREP strategy will get approximately 115 million square feet for $13.4 billion.
Additionally, the company’s income-oriented non-listed REIT, Blackstone Real Estate Income Trust, will get about 64 million square feet for $5.3 billion. Goldman Sachs & Co LLC and Citigroup Global Markets Inc were GLP’s financial advisers on this deal. On the other hand, Blackstone’s financial advisers were Morgan Stanley & Co LLC, BofA Merrill Lynch, J.P.Morgan, Deutsche Bank, and Barclays.