Blackstone’s LogiCor Plans to Double Size of Warehouse Portfolio
LogiCor, Blackstone Group LP’s (BX) European warehouse owner and operator, plans to double its portfolio through 2015 as it seeks to profit from rising rents and values, Chief Executive Officer Mo Barzegar said.
The London-based company bought 1.5 billion euros ($2 billion) of warehouses and distribution centers in the U.K., Poland and France since starting up last year, Barzegar, who is also LogiCor’s president, said in an interview. The company owns 2.5 million square meters (26 million square feet) of logistics space.
“Europe presents a really attractive opportunity because it is a highly fragmented market in terms of ownership of real estate,” he said. “There is an opportunity to create a pan- European provider of modern logistics facilities that has access to capital, can provide quality space to customers and, frankly, provides an alternative in the marketplace.”
Europe’s income-producing warehouses were sold at yields of 7.5 percent at the end of 2012, up from 7.4 percent a year earlier, according to broker Jones Lang LaSalle Inc. (JLL), indicating a decline in prices. Rents and values for warehouses will rise in some European markets because businesses will move out of obsolete buildings and Internet-retail companies will lease more warehouses for deliveries and returns, Barzegar said.
“Because of our access to equity, we can acquire all-cash and put debt on it later,” he said in a telephone interview April 11. “Once you get over 100 million euros, we are definitely very, very competitive because of our ability to move quickly and close quickly.”
LogiCor wants to buy warehouses in Germany and possibly in in Spain, northern Italy, Belgium, the Netherlands and Luxembourg, Barzegar said. Blackstone, based in New York, is the world’s largest private equity firm.
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