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Blackstone, the world’s biggest manager of alternative assets such as real estate and private equity, has invested in nearly all property asset classes as part of its enormous investing footprint and experience – but it has so far not invested in the German logistics sector. It looks as if that’s about to change, with the investor in discussions to buy its first logistics property in Germany.
In an interview with Bloomberg, the group’s managing director in charge of European logistics, Jonathan Lurie, said Blackstone plans to double the company’s European warehouse and logistics holdings over the next two years, and Germany would play a major part in this. The company was negotiating to buy its first asset in Germany and more would follow. “Logistics has been a critical part of Blackstone’s business, and Germany, as the economic engine of Europe, will play a large role,” Lurie said. “We feel very confident about the chances of building a sizable business there.” The deals being looked at include assets in Munich, Stuttgart, Frankfurt, Hamburg and the Ruhr, all near key transportation hubs.
Blackstone owns about 2.8 million sqm of warehouses and distribution centers through its London-based LogiCor unit, founded in 2012. LogiCor CEO Mo Barzegar said in April that the company plans to double its portfolio from its existing 2.45m sqm of space at the time to profit from rising rents and values. Most of LogiCor’s holdings are in the U.K, France and Poland, and the company has recently made acquisitions in the Netherlands and Spain.
Blackstone had avoided Germany so far, said Lurie, because prices had remained higher than in other European countries as the economy remained robust through the financial crisis. “The market in Germany has not been as stressed as the other markets in terms of occupancy or development, so it’s been a harder market to enter,” Lurie said.
According to recent figures from Jones Lang LaSalle, investment in European logistics assets rose to €6bn in the first half, the highest since 2007. The effect of extra demand for German warehouses and distribution centres had already contributed to reducing European logistics yields by 10 basis points in the first half, said JLL.