Blackstone in $19bn deal to buy US warehouse assets from Singapore’s GLP
Deal said to rank as largest private real estate transaction as ecommerce boom fuels billions in logistics investments
Singapore/Bengaluru — Blackstone Group is buying US industrial warehouse properties from Singapore-based logistics provider GLP for $18.7bn, in what the companies billed as the largest private real estate transaction globally.
The deal by the world's largest manager of alternative assets comes when investors are spending billions of dollars to snap up logistics assets as a surge in e-commerce activity spurs demand for delivery and warehouse services.
Blackstone said the overall transaction nearly doubles the size of its US industrial footprint.
"Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing ecommerce demand," said Ken Caplan, global co-head of Blackstone Real Estate.
GLP had scaled up its US business over the past four years to become the second-largest logistics player after Prologis.
Its clients include Amazon.com, Walmart, Adidas and L'Oreal.
Stephanie Lau, senior analyst at Moody's, said that GLP's US assets were likely in locations where supply was constrained, making them more attractive, while high occupancy rates was another positive.
Property-related dealmaking activity has picked up globally in recent years, with $353bn worth of transactions announced in 2018, according to data from Dealogic.
Blackstone will split the GLP assets between two funds: BREP strategy fund ($13.4bn) and Blackstone Real Estate Income Trust ($5.3bn).
GLP turns to Asia
Two years ago, Singapore-based GLP was acquired by management, backed by a China-led consortium, for $12bn in Asia's then largest private equity buyout.
While it will maintain a presence in the US after the Blackstone deal, the company's balance will shift to China and Japan, according to an October 2018 report by Moody's.
Financing activity in the logistics sector is picking up more generally in Asia.
Asian logistics property developer ESR Cayman, a company backed by private equity firm Warburg Pincus, could launch a Hong Kong IPO of up to $1.4bn this week, two people said, although it delayed Monday's planned launch due to volatile markets.
GLP has $64bn of assets under management in its property and private equity funds.
Citigroup, Eastdil Secured and Goldman Sachs advised GLP. Bank of America Merrill Lynch, Barclays, Deutsche Bank, JPMorgan Chase and Morgan Stanley advised Blackstone. Kirkland & Ellis was legal counsel to GLP and Simpson Thacher & Bartlett was legal counsel to Blackstone.