Blackstone, the New York-based private equity real estate giant, has confirmed it has agreed to sell its pan-European logistics platform, Logicor, to Chinese sovereign wealth fund China Investment Corporation for €12.25 billion.
Blackstone said the deal is expected to close later in the year.
Earlier this week, it was widely reported that CIC was the frontrunner to buy Logicor, though neither party would comment at the time.
Blackstone had been looking to either sell Logicor privately or take it public since at least May 2016, but in recent weeks the private sale route became more apparent.
Singapore's sovereign wealth fund, Temasek Holdings – along with its real estate arm, Mapletree Investments – was also an interested party.
Logicor owns and operates a portfolio of high-quality logistics assets totaling 147 million square feet, in 17 countries with over 70 percent concentrated in the UK, Germany, France and southern Europe.
Blackstone built Logicor five years ago using capital from two European opportunistic vehicles, Blackstone Real Estate Partners Europe III and IV, and a global opportunistic fund, BREP VII.
BREP Europe III, a €3.2 billion fund that was closed in 2009, generated a 16 percent net internal rate of return as of March 31, while the fourth fund, which was closed in 2014 on €6.7 billion, had an 18 percent net IRR, according to Blackstone's first-quarter earnings. The $13.5 billion BREP VII, which was closed in 2012, also produced an 18 percent IRR at the end of the first quarter.
The CIC deal eclipses Blackstone's 2014 sale of its US logistics business, IndCor Properties, to Singaporean sovereign wealth fund GIC Private for $8.1 billion.
“We built Logicor through over 50 acquisitions to be a premier pan European logistics real estate company. It will now have an excellent new long term owner, and we have no doubt that it will go from strength to strength in a sector with hugely positive prospects,” said Anthony Myers, Blackstone’s head of real estate in Europe.
“We are excited about the company’s future prospects under the new long-term ownership of CIC with whom we will continue to deliver and exceed our customers’ expectations,” said Mo Barzegar, Logicor’s chief executive officer.
Blackstone was advised by Eastdil Secured, Goldman Sachs and PJT Partners, while UBS and Clifford Chance acted as financial adviser and legal adviser to CIC, respectively.