CIC in the lead to buy €12bn Logicor from Blackstone

The Chinese sovereign wealth fund is on track to beat out Singapore’s state investment firm Temasek and fellow logistics giant GLP to buy Europe’s biggest logistics firm from Blackstone.

China Investment Corporation is the frontrunner to buy Logicor, the biggest logistics business in Europe and one of the biggest in the world, sources with knowledge of the deal confirmed with PEI sister title PERE.

The business, being sold by New York-based private equity real estate giant Blackstone, is expected to fetch as much as €12 billion, which would make it one of the largest real estate transactions since the global financial crisis.

The London-based logistics business has around 146 million square feet of rented logistic space across 630 assets, with tenants such as Amazon.

Although China's sovereign wealth fund is not understood to be in formal exclusivity, it is believed to be the only party in active discussions to buy the business. It is understood bids were submitted last week and a deal could be reached within another week.

A spokesman for Blackstone declined to co­­mment, and CIC could not be reached for comment as of press time.

Blackstone had been looking to either sell Logicor privately or take it public since at least May 2016, however this progress makes an initial public offering an unlikely outcome.

Singapore's sovereign wealth fund, Temasek Holdings – along with its real estate arm, Mapletree Investments – is still an interested party. However, Singapore-listed logistics investment manager Global Logistic Properties is unlikely to be a contender, as the firm is under ongoing a strategic review after receiving several takeover offers itself.

Blackstone built Logicor five years ago using capital from two European opportunistic vehicles, Blackstone Real Estate Partners Europe III and IV, and a global opportunistic fund, BREP VII.

BREP Europe III, a €3.2 billion fund that was closed in 2009, generated a 16 percent net internal rate of return as of March 31, while the fourth fund, which was closed in 2014 on €6.7 billion, had an 18 percent net IRR, according to Blackstone's first-quarter earnings. The $13.5 billion, global-focused BREP VII fund, which was closed in 2012, also generated an 18 percent IRR. 

A sale to CIC would eclipse Blackstone's 2014 sale of its US logistics business, IndCor Properties, to GIC Private, another Singaporean sovereign wealth fund, which worked out at $8.1 billion.

New York-based brokerage Eastdil Secured led the bidding process.