Blackstone buys UK industrial portfolio for $335m

The New York-based private equity giant has purchased a 3.5 million-square-foot portfolio from Prologis on behalf of BREP VII.

The Blackstone Group has closed on the purchase of a 3.5 million-square-foot portfolio of UK industrial properties from Prologis. According to a statement issued by Prologis, the sale price was roughly $335 million, of which $295 million was Prologis' share of the proceeds.

Although representatives from Blackstone declined to comment, sources familiar with the situation have revealed that the New York-based private equity giant acquired the portfolio on behalf of its Blackstone Real Estate Partners (BREP) VII fund, which has raised some $6 billion of its roughly $10 billion target. 

The portfolio comprises 13 properties located in England's Midlands region and Yorkshire. The properties are fully leased with an average unexpired lease term that exceeds nine years. 

Philip Dunne, president of Prologis Europe, said in a statement: “We have sold this portfolio as it no longer fit within our investment strategy and offered us the ability to redeploy our capital.” 

This transaction marks the third warehouse portfolio deal between the two firms. In the fall of 2010, Blackstone bought a 180-property portfolio totaling 20 million square feet of US warehouse assets from ProLogis for $1 billion. In the summer of 2010, Blackstone purchased an 80 percent stake in a ProLogis-managed joint venture with more than 17 million square feet of US warehouse space for $105 million, plus the assumption of $512 million of debt.

As of 31 December, Prologis had 21 million square feet in properties and assets under development in the UK.