Blackstone pays £473m to join the warehouse party

Blackstone has completed the largest warehouse investment purchase on record in Britain as demand is fuelled by the rise of online shopping.

The American private equity group has bought a £473 million portfolio of warehouses around the country from Prologis, a New York-listed investor.

It illustrates the strength of the warehouse property sector as the pandemic forces companies to reassess their logistics operations.

The volume of lettings in industrial and logistics properties in Britain so far this year has already surpassed the previous annual record set in 2016. BNP Paribas Real Estate said that 13.5 million sq ft was let in the third quarter, up 73 per cent on the year. The research covers properties of 100,000 sq ft and more.

James Seppala, 41, Blackstone’s head of European real estate, said: “This transaction demonstrates our conviction in the logistics sector, as ecommerce growth drives demand.”

Josh Holmes, analyst at BNP Paribas, said: “Attention is also turning to Brexit and the trade negotiations, which may lead to more demand-side pressures as businesses look to stockpile or bring supply chains closer to home.”

Prologis, the world’s largest owner of warehouses, sold the properties because it does not fit its principal investment strategy to own logistics parks with multiple properties in the Midlands, the southeast and London.

Paul Weston, 51, regional head of Prologis UK, said the company planned to develop more parks with extra amenities for staff. “Logistics is one of the few areas today where there is the opportunity for new jobs, so we want to create the best environment in terms of the buildings that people work in.”

Source: The Sunday Times