Blackstone plans to close the biggest deal on the real estate market
The investment holding company Blackstone decided to get rid of one of its assets. We are talking about the company Mileway, which owns warehouses. It is reported that Blackstone sold it for 21 billion euros, which is the largest transaction in the warehouse real estate segment for almost 30 years.
Mileway operates 1.7 thousand warehouses located in ten European states, including the U.K., Denmark, Germany, and others. The advantage of this business is that its facilities are located close to major cities, which greatly simplifies logistics and attracts many companies. Among the customers of Mileway are such giants of online commerce as Amazon, logistics operators Deliveroo, and Deutsche Post. Many companies use warehouses as distribution complexes and centers for last-mile deliveries.
Mileway’s facilities have a total area of 14.7 million square meters. The company’s assets have been in Blackstone for about 6 years, and during that time the warehousing business has come to the forefront in Europe and continues to develop actively.
In most cases, Blackstone sells its assets to other market participants and returns the proceeds to investors. Another option is an IPO, in which the holding’s clients also receive their profits. However, in the case of Mileway, Blackstone took a different route. The holding decided to sell the warehousing business not to a third-party company, but to its investors. In this way, the latter can, as before, have a share in the profitable business in perpetuity.
According to a statement from the representatives of Blackstone, this approach was used because the investors of the holding wanted to continue to own the assets of Mileway. The fact is that investing in this type of commercial real estate such as warehouses is extremely profitable, but the market is a limited supply of this type.
That said, not all experts were positive about this deal from Blackstone. They believe it can lead to controversy and a conflict of interest because in this case, the seller and the buyer are almost the same people. To avoid the problem, Blackstone has hired several advisors to help structure the deal correctly and assess the value of the Mileway business. In addition, the company is looking for other buyers for the company in case the sale to investors is not possible.
American corporation was founded in 1985, and during that time under its management were a huge number of successful businesses. One of the most recent acquisitions of the holding company is Crown Resorts, Australia’s largest hotel and casino operator.