Blackstone venture acquires $1.4 billion of Hansteen properties
London: A Blackstone Group LP and M7 Real Estate Ltd venture agreed to acquire Hansteen Holdings Plc’s continental European properties as an improving economy boosts demand for logistics assets.
The Onyx venture will pay about €1.3 billion ($1.4 billion) to Hansteen for the properties in Germany and the Netherlands, London-based Hansteen said in a statement on Monday. The price is a premium of about €76 million, or 6%, to the valuation at the end of last year.
“This is a compelling opportunity to crystallize both the revaluation gains from these German and Dutch assets achieved by our active asset management and the gains from foreign exchange movements,” Morgan Jones and Ian Watson, joint chief executives at Hansteen, said in the statement. “The value being realized is around 30% higher than the book value at 31 December 2015 when measured in sterling.”
Euro-area economic activity unexpectedly rose to the highest level in almost six years in February as the region’s recovery became more broad-based. That’s boosting demand for logistics properties, which have become increasingly attractive to sovereign wealth funds and major pension funds as the growth of internet shopping boosts demand.
The Onyx venture also plans to pay about €130 million for Mbay, a portfolio of Dutch industrial real estate currently owned by M7 and H.I.G. Capital LLC, and is near a separate deal to acquire about €130 million of Danish industrial assets, according to two people with knowledge of the matter who asked not to be identified because the details aren’t public.
Prime European warehouses are forecast to have average returns of 7.6% annually over the next five years, compared to 6.4% for malls and 5.2% for offices, according to a March report by Deutsche Bank AG.
“There is huge appetite for logistics assets right now as they provide steady income,” Sigrid Duhamel, head of France at real estate fund manager CBRE Global Investors LLC, said in an interview at a conference Tuesday. “It’s all about e-commerce—for every five shops that close, one logistics property opens.” Bloomberg