(Bloomberg) — Blackstone Inc. plans to merge a pair of warehouse landlords it took private to create one of the UK’s largest owners of industrial property.
The private equity firm will integrate the management of St Modwen and Industrials REIT, together with assets acquired through 25 other deals, to create a company called Indurent, according to a memo sent to staff on Monday.
The company will own more than 200 properties spanning about 26 million square feet, a spokesperson confirmed. That would make it one of the largest owners of UK logistics properties behind Segro Plc, which has a UK portfolio spanning almost 30 million square feet and Tritax Big Box REIT.
Read More: Tritax Offers to Buy UK REIT in $1.2 Billion All-Share Deal
Blackstone has poured cash into UK warehouses, investing £2.1 billion ($2.6 billion) in the development pipelines of St Modwen and Industrials REIT since their acquisition. The firm is betting on the transformation of global supply chains to drive further growth in warehouse rents, which have soared in recent years.
“UK logistics is a high conviction theme for Blackstone given our portfolio’s exceptionally strong performance and favorable long-term fundamentals in the sector,” Blackstone’s head of European real estate James Seppala said. “As a pure-play UK logistics company with an exceptional team, Indurent will enable us to continue to capitalize on opportunities in the sector and create value for our investors.”
The move echoes Blackstone’s previous ventures in UK and European warehouse properties, starting with Logicor, which it established, scaled and sold to China’s sovereign wealth fund. It repeated a similar play book with Mileway, an owner of so-called last mile urban warehouse properties, which it recapitalized in 2022 in the largest ever European real estate deal.
Creating a large integrated platform for the PE firm’s UK warehouse investments helps position the business for a future sale. That’s because major sovereign wealth and pension funds looking to increase their exposure to warehouse investments also need management teams to operate them. It could also pave the way for a future initial public offering.
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