Prologis, the world’s largest warehouse owner, has made an offer to buy Blackstone’s portfolio of logistics properties in what would be the largest private real estate deal ever, in an industry where the Covid-19 pandemic and the rise of online shopping have boosted values sharp.

Prologis has made a non-binding offer of just over €21 billion for Mileway, a portfolio of nearly 2,000 European warehouses that Blackstone has built through acquisitions over the past six years, according to people familiar with the matter.

The company now has about six weeks to make an offer that meets a number of conditions set by the funds selling Mileway, one of the people said.

Warehouses have been a winning bet for the past two years, with the share of online sales rising across the continent as the coronavirus forced shoppers to stay at home.

The disruption of supply chains caused by the pandemic, the blockage of the Suez Canal by the container ship Ever Given and more recently the Russian invasion of Ukraine have also prompted companies to store more materials.

Prologis stock is more than 60 percent higher than before the pandemic, giving the company a market cap of nearly $120 billion.

Blackstone had indicated last month that it would maintain its exposure to the sector when it announced plans to recapitalize Mileway at a valuation of €21 billion, allowing investors to get in and out while maintaining control of the portfolio.

But those plans included a 75-day “go-shop” period during which higher bidders could make an offer. Of the roughly 20 potential buyers approached by Morgan Stanley, the bank that manages the process, eight were looking seriously at Mileway, but only Prologis made a non-binding offer, one of the people said.

Should Prologis make a binding offer, the consortium behind the proposed recapitalization – which includes previous Mileway investors and some of Blackstone’s own funds – could respond with a new proposal.

If Prologis’ bid, first reported by React News, is successful, it would give the company a dominant position in European “last-mile” facilities – smaller warehouses serving customers in cities.

Blackstone and Prologis declined to comment.


This post Prologis Hunts For Blackstone’s €21 Billion Warehouse Portfolio was original published at “https://www.ft.com/content/d20553d4-2fe8-4f5b-9b58-66657aba1979”

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