CIC aims for Blackstone’s European logistics branch
China Investment Corp (CIC, ????) is the front-runner in the race to acquire Blackstone Group LP’s European logistics business Logicor for about 12 billion euros (US£13.54 billion), a person familiar with the matter said. Temasek Holdings Pte and Mapletree Investments Pte Ltd are still in the bidding process, the person said, asking not the be identified because the talks are private. The news was first reported on Monday by Estates Gazette magazine.
Blackstone, which created Logicor in 2012, is cashing out as demand for European logistics properties grows. Logistics properties have become increasingly attractive to sovereign wealth and pension funds after the growth of Internet shopping boosted demand from occupiers. CIC owns a stake in New York-based Blackstone after investing in the company in 2007 and 2008.
A CIC entity owned about 4.6 percent of the asset manager as of February, according to Blackstone’s annual report. A spokeswoman for Blackstone and CIC’s Beijing-based news office did not immediately reply to requests for comment. Representatives for Temasek and Mapletree declined to comment.
Prime European warehouses are forecast to generate average returns of 7.6 percent annually over the next five years, compared with 6.4 percent for malls and 5.2 percent for offices, a March report by Deutsche Bank AG said. London-based Logicor owns about 13.7 million square meters of logistical space across Europe, rented to companies including Amazon.com Inc and DHL Worldwide Express. Carlyle Group LP on Tuesday said that it had agreed to buy a 180,000m2 logistics portfolio in France from Prologis Inc.
The private equity fund is building up investments in the industry to take advantage of the growth in online shopping, it said in a statement.
For CIC, the investment would be one of a dwindling number of outbound Chinese acquisitions, as the nation’s acquirers cope with tighter capital controls and wary sellers.
Chinese firms have agreed to spend about US£47 billion on overseas targets so far this year, down 62 percent from the same period a year ago, according to data compiled by Bloomberg.