US private equity firm Blackstone is partnering with Delin Capital Asset Management (DCAM) on a new core+ logistics strategy in the UK and western European markets.
The new partnership comes as Blackstone works to sell or IPO Logicor, its €12 bn European logistics property platform. Under the agreement, DCAM and Blackstone's Core + platform have established a partnership to acquire prime logistics assets in Germany, Benelux and the UK.
DCAM has contributed an initial seven asset portfolio of UK and Dutch assets to the venture comprising over 230,000 m2 of leased Grade-A logistics space, including a 58,400 m2 pre-let development in Roosendaal in the Netherlands. DCAM will be asset manager to the partnership.
The investment volume for the seed assets has not been disclosed, but PropertyEU has established a price range of €220-250 mln.
Big fan
The tie-up reflects the fact that Blackstone is a big fan of the logistics sector in Europe, and wants to stay involved even if Logicor finds a new home. While Blackstone is known primarily as an opportunistic investor, this venture is backed by its core+ strategy. This illustrates how the private equity firm is creating new ways of investing in logistics, by going in at the development stage to lock in stable and long-term returns.
The main issue for Blackstone would have been identifying the best logistics specialist partner. The largest logistics developers in Europe, such as Goodman, Prologis, P3 and Panattoni, have already sealed their own marriages with big capital.
DCAM is a mid-sized regional specialist that started as a fund and asset manager. Led by Ekaterina Avdonina (pictured), the firm emerged as the ideal candidate as it had recently development to its business model and was looking for a capital partner to help fund the pipeline. Blackstone and DCAM are believed to have been aware of each other for some time.
Independent partner
DCAM and Blackstone plan to grow the portfolio through additional investment in logistics assets 'where locations are underpinned by a demand/supply imbalance'.
DCAM will continue to operate as an independent company, much in the same way that M7 Real Estate operates as an independent asset manager for Blackstone's new venture for light industrial assets.
This is in contrast to Blackstone's other main European platforms, Logicor, Multi Corporation for shopping centres and OfficeFirst for German offices, all of which are fully owned by the private equity firm's real estate arm.
New opportunities
DCAM's Avdonina said in a press release on Tuesday: 'We are delighted to have created this new partnership with an established real estate investor in Blackstone and look forward to growing it over the coming years leveraging our combined experience to identify and acquire new opportunities across our target markets.
'Occupier demand for high-quality and well-located warehouse and logistics space continues to gain momentum, underpinned by the structural changes taking place in consumer shopping habits. With the sector having demonstrated ongoing resilience and outperformance, we are confident that underlying market fundamentals are in place to support this new vehicle.'
DCAM will continue to manage its own portfolio of logistics assets whilst increasingly focusing on the development of new assets and investing in value-add logistics opportunities across its target geographies of the UK, Benelux and Germany.
JLL advised DCAM, and Blackstone was advised by CBRE.
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NEW EVENT
Real Estate Private Equity
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UBS Asset Management - Atrium, 7th Floor, 5 Broadgate,
London, EC2M 2QS, United Kingdom | 26 April, 08:00 - 11:00
For the first time, PropertyEU has organised a private equity real estate event examining the European market.
Hear from Ric Lewis, Chief Executive and Chairman of Tristan Capital Partners, as he delivers a TED-style talk followed by an interview on the realities of investing in 2017.
Joining him are Thomas Wels, Head of Real Estate and Private Markets at UBS Asset Management, plus two prominent investor-consultants: Paul Richards, Head of European Real Estate at Mercer and Paul Jayasingha of Willis Towers Watson.
Robin Marriott, editor of PropertyEU's CapitalWatch, is moderating the event.
Highlights include:
- What the top private real estate firms are doing
- Which strategies investors/limited partners are keen on
- How the competitive landscape is shaping up
- Who are the emerging managers to watch?
- Insights into the fund management industry
Attendance is free but places are strictly limited. Please register here to book your place
