Blackstone Buys 80% of Burstone’s European Logistics Platform

Burstone Group has announced that it has entered into a strategic partnership with the world’s largest alterative asset manager Blackstone in Europe, marking the acceleration of its international fund and investment management strategy.

In the largest of the transactions, funds managed by affiliates of Blackstone, which has more than $1 trillion in Assets Under Management (AUM), will acquire an 80% interest in the Group’s Pan-European Logistics (PEL) platform valued at $1.13 billion.

Burstone will retain a 20% co-investment in the PEL platform while continuing to manage the portfolio’s assets and the proposed transaction is subject to regulatory and shareholder approvals, the company said.

Amassed since 2017, the portfolio comprises 32 high quality midsize and big-box logistics properties located around key European urban centres in seven countries, with the majority in Germany, France and the Netherlands.

The 1.2 million sqm portfolio is 97% occupied by over 110 tenants, primarily in the third-party logistics sector, which benefit from the assets’ strategic micro locations with exemplary transport connectivity.

Together, Burstone and Blackstone will expand the PEL portfolio by focusing on aggregating industrial and logistics properties across core European markets.

Burstone Group CEO Andrew Wooler said that they have been looking for strategic partnerships in Europe and were delighted to partner with Blackstone. This partnership deepens their already strong relationship with Blackstone’s operational and management team, who know Burstone’s European team well from previous successful collaborations.

“Partnering with such a best-in-class international business unlocks exciting opportunities for the platform, enhancing scalability and driving the growth potential of the Group’s fund and investment management business,” Wooler said.

The transaction means that Burstone Group has made significant strides in deleveraging its balance sheet and optimising capital allocation.

Blackstone’s Head of European Real Estate James Seppala said that logistics is one of their highest conviction investment themes globally. This exceptionally well-located portfolio of assets in core logistics markets across Europe is additive to our existing portfolio and allows them to continue to capitalise on customer demand, including as a result of growing e-commerce penetration trends across the continent.

Burstone’s Other Investments

In addition to its strategic Blackstone partnership, Burstone is in exclusive negotiations to acquire a 25% co-investment stake and ongoing management of a $188.01 million German light industrial platform. This transaction is expected to be significantly earnings accretive and will replicate Burstone’s successful track record in light industrial investments.

Burstone Group’s 50/50 JV with Australian Irongate Group, which has announced a new industrial joint venture with a leading global alternative asset management firm.

An initial soft commitment of $134.73 million of equity has been earmarked with the aim to upsize upon successful deployment. Burstone (alongside Irongate management) will provide the minority co-investment stake and the Irongate JV will provide the investment and asset management functions.
The JV will acquire an initial portfolio of industrial and logistics assets in Queensland, with a total purchase consideration of approximately $94.31 million and equity from the JV of approximately $53.89 million. Post the current identified pipeline total equity under management is expected to increase 32% since acquisition, from $303.15 million to $404.2 million.

The Group has built the foundation for a third-party fund management platform in which institutional capital can invest. In South Africa, Burstone is negotiating with cornerstone investors to build an SA Core Plus platform, utilising a portion of its South African assets to seed this new venture.