 "Blackstone Group top bidder for ESR, German investor Allianz platform")
US-headquartered investor Blackstone Group has emerged the highest bidder to buy a 90 per cent stake in the warehousing platform of Asia-focused logistics company ESR and German investor Allianz. The marquee investor has quoted Rs 2,000 crore for the stake, informed sources in the know. Blackstone has overtaken the likes of GIC and Ontario Municipal Employees Retirement System to become the finalist to pick up stake, said sources. While Allianz is exiting its investment by selling its 50 per cent stake, ESR is selling 40 per cent and holding 10 per cent in the platform.
“They (ESR and Allianz) have finalised on Blackstone. The deal is expected to be signed soon,” said sources. “The total value of assets is $450-475 million,” they added.
The platform, set up in late 2018, has eight assets with an area of 10.5 million square feet (msf). The 50:50 partnership between ESR and Allianz planned to invest $1 billion in the venture. Sources said the platform ran a bidding process through Anarock Capital.
Blackstone did not offer any comments. Emails sent to ESR and Allianz did not elicit any response until the time of going to press.
A BIG DEAL
- Allianz selling 50% stake, ESR 40% and holding 10% in the platform
- Total value of assets: $450-475 million
- The platform, set up in late 2018, has eight assets with an area of 10.5 million square feet (msf)
- The 50:50 partnership between ESR and Allianz planned to invest $1 billion in the venture
- Blackstone plans to expand its warehousing portfolio by 2.5x to 100 msf, from the current 40 msf
Blackstone is looking to expand its warehousing portfolio by 2.5x to 100 msf, from the current 40 msf, in the next three to five years, said recent media reports.Blackstone set up a platform for warehousing called Horizon Industrial Parks (Horizon), headed by Rahul Pandit in 2022.
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In 2021, funds managed by Blackstone acquired Embassy Industrial Parks from Warburg Pincus and Embassy Group for an enterprise value of $700 million. Blackstone also has a joint venture with Hiranandani Group for warehousing assets in the country. Since its inception, Horizon has added a portfolio of 3.7 msf to its existing portfolio and built another 5 msf with a capital outlay of Rs 4,500 crore.
Blackstone has a global warehousing portfolio of 1.2 billion square feet: this is 37 per cent of its total real estate portfolio. Capitalisation rates, which help investors evaluate a real estate investment in warehousing properties, have come down from 8-8.5 per cent a few years ago to 7 per cent now, as more investors are betting on them, observed bankers and investors dabbling in such properties.
Consultants said more institutional investors are betting on growth in the warehousing sector, which has limited Grade A stock now. These investors are trading off lower yields for future growth, said experts, adding that warehousing is growing faster than office properties, and the stock is half the total office stock in India.