Blackstone is considering establishing a new pan-European light industrial platform alongside M7 Real Estate.
The new platform is expected to be a multi-billion-euro business that will take advantage of economies of scale.
It would be funded by Blackstone and asset managed by M7. Blackstone is currently investing funds in Europe from its $15.8bn (£12.8bn) Blackstone Real Estate Partners VIII fund and its Blackstone Real Estate Partners Europe V fund, which has held a €5.5bn (£4.8bn) first close.
Blackstone has bought a €112.5m portfolio of 26 French assets, mostly around Paris, from MStar, M7’s joint venture with Starwood Capital. M7 has been retained as asset manager and, should the new platform be formed, this would be part of a seed portfolio.
The tie-up may buy assets from more vehicles managed by M7, as well as purchase portfolios and companies.
M7, led by chief executive Richard Croft, has built €2.3bn of assets under management since it was formed in 2009. Partners include Goldman Sachs, Baupost Group and Oaktree Capital Management. In 2015, it formed a strategic alliance with a Hong Kong-based family, understood to be the Kwoks.
The light industrial sector is becoming increasingly attractive to institutional investors, due to the high demand for last-mile delivery from online retailers and its traditionally high-yielding returns.
A Blackstone business focused on light industrial and last-mile distribution would be a natural evolution from the big-box Logicor business it created in 2012 and is now looking to offload through a €13bn sale or IPO.
Eastdil Secured and Goldman Sachs are advising Blackstone on the disposal of Logicor.
M7 grows new arms
Two new M7 Real Estate-related businesses have been formed with leading names recruited to head them.
M7 Credit will invest in distressed debt and is led by former Mount Street partner Bill Sexton. Sexton and M7 chief executive Richard Croft were co-founders of Halverton Real Estate Investment Management.
Tunstall Real Estate Asset Management will consider direct and indirect opportunities, including senior and mezzanine debt, public to private deals, convertible securities and equities. Its ownership is separate to M7 but it will use its infrastructure. Roger Clarke, former head of investment banking at Stifel, is leading the business.
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