The Blackstone Group is considering either selling its European industrial-property arm in a deal that could value the company at more than $11 billion, or moving forward with an initial public offering that could be one of the largest ever on the continent.
The world’s largest landlord is weighing the sale of its Logicor unit that has about 137 million square feet of logistics space, Bloomberg News reported. The $11 billion valuation would include debt, sources told the news site.
Blackstone is consulting with advisors, but has yet to hire anyone.
If the company decided to list 30 percent of Logicor, it could be one of the largest IPOs ever seen in European real estate. Russian property developer PIK Group PJSC’s 2007 IPO of $1.85 billion is the current record holder.
In 2014 Blackstone scrapped plans for an IPO for its U.S. logistics portfolio IndCor Properties Inc. and sold the company to to GIC, Singapore’s sovereign wealth fund, for $8.1 billion.
Blackstone launched Logicor in 2012 and is looking to reap the financial rewards as demand grows in Europe for logistics properties. Rents for top properties grew last year 2.6 percent and values climbed 12 percent as companies leased the most industrial space ever, according to CBRE data cited by Bloomberg.
While Asia and Europe are the most expensive markets for logistics real estate in the world, the Americas outperformed the global average by nearly 3 percent on a year-over-year basis.
New Jersey ranked second in terms of growth at 15 percent, just behind Oakland, California.
Blackstone’s real estate division had $31.2 billion of dry powder – or committed money from investors that has yet to be spent – at the end of the first quarter, as The Real Deal previously reported.
Jonathan Gray, head of the real estate group, said the United States real estate market is entering a mature phase that tends to limit opportunities for investors that are looking for high yields.
[Bloomberg] – Rich Bockmann