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PLD - Prologis Inc News Story

$116.02 1.3  1.1%

Last Trade - 07/05/21

Sector
Financials
Size
Large Cap
Market Cap £61.43bn
Enterprise Value £75.89bn
Revenue £3.30bn
Position in Universe 146th / 6858

BREAKINGVIEWS-Blackstone sale delivers small logistics message

Mon 19th April, 2021 4:34am
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.) By Jeffrey Goldfarb MELBOURNE, April 19 (Reuters Breakingviews) - Any big Blackstone BX.N property deal typically warrants a closer look. Through good timing and luck, the buyout shop’s transactions have signalled troughs and peaks in office buildings, hotels and homes over the years. Its decision to offload a giant collection of Australian warehouses for A$3.8 billion ($2.9 billion) provides a similar indicator about industrial real estate, but probably something subtler about the booming sector. Blackstone started rolling up storage facilities Down Under five years ago, following a trend of rising rents in its North American and European holdings. Australia has been an e-commerce laggard, but the pandemic accelerated a shift and helped boost demand. The Milestone Logistics portfolio is nearly fully occupied, and its 3.6 million square metres of land is less than 40% used, suggesting there’s scope for more development. That held appeal for ESR Cayman 1821.HK , the $10 billion Hong Kong-based logistics company buying Milestone in partnership with Singapore’s GIC. Although it expects a healthy initial yield of 4.5%, it also paid a price rich enough to outbid several other suitors and to derail an initial public offering option that had attracted significant interest. For Blackstone, there’s a possibility a sale suited the life cycle of its funds backing the Australian venture. At the same time, valuations have soared in logistics as investors seek to capitalise on the Covid-19-induced rally for online retail. And despite sharp rises in the stock prices of ESR and U.S. peer Prologis PLD.N over the past year, both also have lagged the broader S&P 500 index. There’s no clear global call here from Blackstone. It just bought 70% of a logistics park in China’s Greater Bay Area for $1.1 billion, for example. Even so, it has been devoting greater attention to the so-called last mile of supply chains, evidenced in its U.S.-based Link Logistics and European Mileway investments that focus on smaller urban sites rather than sprawling ones on city outskirts. The Australian sale feeds into that broader message being delivered. Follow @jgfarb https://twitter.com/jgfarb on Twitter CONTEXT NEWS - Property manager ESR Cayman said on April 18 it had agreed to buy an Australian warehouse and logistics business from private equity firm Blackstone for about A$3.8 billion ($2.9 billion). - Hong Kong-based ESR will contribute 20% of the equity in a newly-created investment vehicle for the acquisition of Milestone Logistics, which owns 45 assets across the country. Singapore’s GIC will own the rest. - For previous columns by the author, Reuters customers can click on GOLDFARB/ <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ESR press release https://www.esr.com/cms/files/431/2021/0418/20210418194748_98624364_en.pdf ESR announcement https://files.services/files/431/2021/0418/20210418194501_08641204_en.pdf ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS http://bit.ly/BVsubscribe | Editing by Robyn Mak and Katrina Hamlin) ((jeffrey.goldfarb@thomsonreuters.com; Reuters Messaging: jeffrey.goldfarb.thomsonreuters.com@reuters.net))
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