Blackstone Closes Largest ever €8.1bn European Real Estate Refinancing Deal

Feb 23, 2024 | News

Blackstone Inc. has completed European real estate’s largest-ever refinancing with €8.1 billion ($8.8 billion) of fresh debt for its Mileway warehouse business.

The private equity firm has agreed a trio of five-year loans, each priced at about 2.5 percentage points over benchmark rates, according to people with knowledge of the facilities. They include a €4.2 billion loan for Mileway’s portfolio in continental Europe, an €800 million revolving credit facility and a £2.7 billion loan secured against a portion of the company’s UK assets, said the people, asking not to be identified as the details are not public.

The jumbo loans show lenders’ appetite for logistics properties which have continued to see strong rental growth, helping offset the impact of rising rates on their valuations. The margins on the loans are significantly lower than other warehouse deals Blackstone financed last year and are roughly in line with the loans they are refinancing that were arranged before Russia’s invasion of Ukraine. Still, Mileway’s shareholders have injected about €500 million of equity as part of the deal to maintain a loan-to-value ratio of about 50%, the people said.

The combined value of the loans exceeds a €4.7 billion financing package for hotel landlord AccorInvest Group SA agreed in 2021, according to data compiled by Bloomberg.

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Mileway owns about 151 million square feet of warehouse space across 1,600 properties, making it Europe’s largest logistics owner. Blackstone recapitalized the company in 2022 in a €21 billion deal in which the original fund investors were offered the chance to sell, though most reinvested.

Barclays Plc acted as sole lead arranger for the UK facility and plans to partially syndicate its position, the people said. The bank plans to allocate more capital to the UK, Chief Executive Officer C.S. Venkatakrishnan said on an earnings call Tuesday.

Sumitomo Mitsui Banking Corp., Goldman Sachs Group Inc. and Royal Bank of Canada acted as global coordinators on the European facility with Morgan Stanley, JPMorgan Chase & Co., BNP Paribas SA., Bank of America Corp. and Deutsche Bank AG acting as mandated lead arrangers and book runners.

CoStar News previously reported that Blackstone was close to refinancing some of the loans.

Source: Yahoo Finance

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