Hansteen Rises to Highest in 10 Years on Blackstone Asset Sale

  • Blackstone and M7’s Onyx joint venture to buy logistics assets
  • Onyx said to plan additional deals in Denmark and Netherlands

Hansteen Holdings Plc rose to the highest since 2007 after the company agreed a deal to sell its continental European properties to a Blackstone Group LP and M7 Real Estate Ltd. venture.

The Onyx venture will pay about 1.3 billion euros ($1.4 billion) for the properties in Germany and the Netherlands, London-based Hansteen said in a statement Monday. The price is a premium of about 6 percent to the valuation at the end of last year and the deal is expected to close before the end of June.

Hansteen, which plans to return a substantial portion of the cash to shareholders, climbed as much as 7 percent and was trading at 124.9 pence at 8:19 a.m. in London trading.

“This delivers a good return as the European assets hit cyclically high occupancy and rents,” David Brockton, an analyst at Liberum Capital Ltd., wrote in a note to clients. “Following the likely return of the bulk of the cash proceeds, the remaining U.K.-weighted business is well placed to deliver attractive returns.”

Euro-area economic activity unexpectedly rose to the highest level in almost six years in February as the region’s recovery became more broad-based. That’s boosting demand for logistics properties, which have become increasingly attractive to sovereign wealth funds and major pension funds as the growth of Internet shopping boosts demand.

"This is a compelling opportunity to crystallize both the revaluation gains from these German and Dutch assets achieved by our active asset management and the gains from foreign exchange movements,” Morgan Jones and Ian Watson, joint chief executives at Hansteen, said in the statement. “The value being realized is around 30 percent higher than the book value at 31 Dec. 2015 when measured in sterling.”

The Onyx venture also plans to pay about 130 million euros for Mbay, a portfolio of Dutch industrial real estate currently owned by M7 and H.I.G. Capital LLC, and is near a separate deal to acquire about 130 million euros of Danish industrial assets, according to two people with knowledge of the matter who asked not to be identified because the details aren’t public.

Prime European warehouses are forecast to have average returns of 7.6 percent annually over the next five years, compared to 6.4 percent for malls and 5.2 percent for offices, according to a March report by Deutsche Bank AG.

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