Blackstone makes big bet on European ‘last mile’ urban warehousing

There has been considerable interest in Blackstone’s latest European mega-logistics project barely two years after it sold its previous pan-European logistics company Logicor to China Investment Corporation for €12.25bn.

This time around Blackstone is bundling its European logistics interests into what will be an €8bn pan-European last-mile logistics real estate company known as Mileway. The Mileway assets, now the largest portfolio in Europe of so-called “last-mile” properties, are used by ecommerce powerhouses like Amazon and as ‘dark kitchens’ by the food delivery companies like Deliveroo and Lieferando.

The new business will be headquartered in Amsterdam and will own and operate about 1,000 logistics assets that Blackstone has been accumulating over the past several years. The portfolio, with more than 9 million sqm of lettable space, contains assets in urban centers across Europe’s largest economies, including the UK, Germany, France, Spain, the Netherlands and the Nordics.

To spearhead the drive, Blackstone has recruited former Goodman European logistics fund director Emmanuel Van der Stichele to head up the business and expand its portfolio in new and existing markets.

According to James Seppala, head of Blackstone Real Estate Europe, “Mileway is a natural evolution of our European logistics strategy, which is one of our highest conviction, long-term investment themes. As the largest last-mile logistics real estate company in Europe, Mileway will meet growing e-commerce-related demand for last-mile logistics real estate, facilitate faster delivery times and support the growth of small and large businesses.”

New boss Van der Stichele, who will be supported by Dominiek Van Oost as COO and Thomas ten Bokum as head of investment and portfolio management, said of the new plans: “The growth of e-commerce and urbanisation is intensifying the requirement for faster logistics solutions. Mileway is the number one gateway to urban markets, and we are uniquely positioned to help businesses shorten delivery times, grow their customer base and scale geographically.”

The Mileway launch embodies Blackstone's growing interest in the global logistics sector. Since 2010, Blackstone has acquired nearly 1 billion square feet of logistics around the world.

Logicor was founded by Blackstone's real estate division in 2012 to manage and operate its European logistics assets. By June 2017, the platform was operating over 630 properties, before Blackstone sold the bundled-up group China's sovereign wealth fund.

However, Blackstone bought back 10% of Logicor from CIC six months after the sale, with CIC hiring Blackstone to manage Logicor's warehouses and logistics property portfolio. Since then Blackstone has continued to accumulate logistics portfolios in a clear sign of its commitment to logistics, with a focus on the ever more critical last-mile sector.

Just prior to announcing the CIC deal, the firm agreed to a €1.28bn deal with UK REIT Hansteen to acquire the firm's entire German and Dutch light-industrial portfolio, in a joint venture with M7 Real Estate. Then, in January 2018, Blackstone locked down a further portfolio of European logistics properties from Goodman Group for €600m.

However months later, the private equity giant missed out on securing Gramercy Europe's extensive warehouse portfolio, when Clarion Partners swooped in to scoop up Gramercy Europe, which had extricated itself from the New York-listed Gramercy Property Trust (GPT), of which it had been a part before an audacious management buyout, and which (GPT) was subsequently bought by Blackstone.