Burstone Group (“Burstone”), the international real estate business, has formed a strategic partnership with funds managed by affiliates of Blackstone, the world’s largest owner of commercial real estate, (the “Partnership”), following Blackstone’s acquisition of an 80 percent stake in Burstone’s c.€1.1 billion Pan-European Logistics (PEL) platform. Burstone Group will retain the remaining 20 percent stake, with its highly experienced Burstone Europe team, led by Managing Director Paul Rodger, continuing to manage the portfolio.
Amassed since 2017, the portfolio comprises 32 high-quality midsize and big-box logistics properties located around key European urban centres in seven countries, including Germany, France and the Netherlands. The 1.2 million sqm portfolio is 97 percent occupied by over 110 tenants, primarily in the third-party logistics sector, which benefits from the assets’ strategic micro-locations with exemplary transport connectivity.
The Partnership will focus on continuing to capture the current portfolio reversion, whilst 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.
The transaction will enable Burstone to accelerate its international fund and investment management strategy as it seeks to drive sustainable growth across its global operations. It is one of several transactions that on completion will see Burstone’s third-party assets under management increase from €240 million to c.€1.2 billion, with a total GAV of c.€2.1 billion. Revenues from fund and asset management are projected to more than double over the next 12 to 24 months.
The transaction complements Blackstone’s existing big box to last mile portfolio and continues its track record of investing in logistics across Europe. Over the past decade in Europe, it has successfully built the largest owner of last mile logistics real estate assets in Europe, Mileway; created a leading owner, manager and developer of European logistics real estate, Logicor; and most recently launched a new UK developer and operator of industrial and logistics space, Indurent.
Andrew Wooler, Chief Executive Officer, at Burstone Group, commented: “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 favourable 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, Blackstone, said: “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.”
