Blackstone Group LP has committed $18.7 billion towards the acquisition of a network of warehouses in one of the largest private real estate deals as the company continues to bet on burgeoning e-commerce. The company is buying form GLP, which is a Singapore based global investment manager whose largest tenants are Amazon and FedEx.
Increase in demand for warehouse space driven by growing e-commerce
The amount will be spent in acquisition of 179 million square feet of urban space, which will almost double the US industrial footprint of Blackstone. With the rise of Amazon and other e-commerce retailers, the demand for warehouse space is growing enterprises move to grow digital operations while at the same time cutting costs. With trends shifting to online shopping, the supply chains are reconfiguring, which in turn is changing fortunes of landlords with increasing demand around cities.
The acquisition follows a number of deals that Blackstone has made in sales and purchases in recent times. Last year in October they took over Gramercy Property Trust in a $7.6 billion deal and also acquired Canyon Industrial Portfolios for $1.8 billion, Pure Industrial Real Estate trust for around $2.6 billion and over 100 warehouse assets belonging to Harvard University endowment for around $950 million.
Blackstone growing its investment in logistics
Blackstone’s highest investment priority is logistics, and GLP acquisition perfectly fits the company’s vision. The company is focused on the building of its portfolio to meet the growing demand in the e-commerce sector. Blackstone’s real estate senior managing director Nadeem Meghji indicated that they continue to be the largest investor in the logistics sector in the world.
Besides Blackstone, other companies are also waging big on the growth of the e-commerce industry. Berkshire Hathaway Inc. has been purchasing Amazon share, and at the end of March, its bet on the company was approximately $860.6 million.
GLP has a vast portfolio of around 1,300 properties that includes Amazon and Whirlpool, who are the main tenants. Others include United Parcel Service Inc. FedEx Corp, L’Oreal SA, Home Depot Inc. Tesla, Inc., and Starbucks Corp.
Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with our FREE daily email newsletter.