Prologis enters hunt for Blackstone’s €21bn warehouse portfolio

Prologis, the world’s greatest warehouse proprietor, has launched a bid to purchase Blackstone’s portfolio of logistics properties in what could be the biggest ever personal actual property deal, in a sector the place the Covid-19 pandemic and the rise in on-line procuring have pushed values up sharply.

Prologis has made a non-binding supply of a bit of over €21bn for Mileway, a portfolio of just about 2,000 European warehouses that Blackstone has been constructing via acquisitions over the previous six years, in accordance with individuals accustomed to the matter.

The corporate now has about six weeks to finalise a bid that satisfies plenty of circumstances laid down by the funds promoting Mileway, in accordance with one of many individuals.

Warehouses have been a profitable wager over the previous two years, during which the proportion of gross sales made on-line has surged throughout the continent whereas coronavirus compelled consumers to remain at dwelling.

The disruption to provide chains brought on by the pandemic, the blockage of the Suez Canal by the container ship Ever Given and extra not too long ago Russia’s invasion of Ukraine have additionally led firms to stockpile extra supplies.

Prologis shares are greater than 60 per cent up on their pre-pandemic stage, giving the corporate a market capitalisation of near $120bn. 

Blackstone had indicated that it might retain its publicity to the sector final month when it introduced plans to recapitalise Mileway at a €21bn valuation, permitting buyers to shuffle in or out whereas retaining management of the portfolio.

However these plans included a 75-day “go-shop” interval during which greater bidders may put ahead a suggestion. Of 20 or so potential patrons approached by Morgan Stanley, the financial institution managing the method, eight appeared severely at Mileway however solely Prologis submitted a non-binding bid, mentioned one of many individuals.

Ought to Prologis put ahead a binding supply, the consortium behind the proposed recapitalisation — which incorporates earlier Mileway buyers and plenty of Blackstone’s personal funds — may reply with a brand new proposal.

If the Prologis bid, which was first reported by React Information, is profitable, it might give the corporate a dominant place in European “last-mile” amenities — smaller warehouses which serve prospects in cities.

Blackstone and Prologis declined to remark.