Blackstone set to launch $3.5bn Australian logistics property portfolio

The investment house would name the $3.5bn Australian logistics property portfolio, that it has begun touting in a dual-track process, Milestone, and seek to make it one of the largest local owners it floats.

Blackstone would likely seek to raise more than $1bn in equity while also keeping a substantial stake itself as it has done initially when listing businesses offshore.

The private equity group has tapped investment banks JPMorgan and Morgan Stanley for the float and real estate advisers US firm Eastdil Secured and global firm JLL have put out an initial flyer to direct property buyers.

But listed investors are hopeful that Milestone will hit the ASX boards as a means of playing the e-commerce driven boom in logistics property.

Preparations for a listing of Milestone come as British billionaire Sanjeev Gupta again tries to float the InfraBuild Australian steel operations and Quadrant Private Equity considers a float of the Peter Warren Automotive Group.

The Milestone portfolio is being pitched as the world’s largest industrial property sale this year and initial information has been released to prospective trade buyers spruiking a focus on the eastern seaboard and major tenants including Woolworths.

The campaign to float the assets as a real estate investment trust on the Australian Securities Exchange is to start later in January.

The big driver for listing Milestone would be the prospect of the company rocketing into major share indexes and it becoming the largest pure play local industrial trust.

Global giant the Goodman Group also holds properties in Asia, Europe and the US while Centuria Capital Group currently runs the largest locally focused industrial trust.

Charter Hall has rapidly built up a $10bn local industrial property empire but it is held via its unlisted funds empire.

Listed investors have chased warehouses on the back of the warehouse boom as large shopping centres have fallen from grace.

The Goodman Group returned 44%last year and now makes up about one quarter of the A-REIT index and a listing of Milestone would tip the balance even more towards logistics in that area.

Investors would likely pay a premium price as values are rising on the back of the e-commerce boom and Milestone would be well-positioned to grow its 45-strong portfolio should it list.

The attractive nature of the assets also make them a good prospect to be snapped up by an existing player, whether locally or offshore.

Blackstone declined to comment but has flagged its commitment to its $12bn property operation in Australia, which the industrial property portfolio has been a key component.

The company has long been a leader globally in assembling logistics and industrial property platforms and then selling them when they have reached maturity.

Logistics property has transformed during the coronavirus crisis, with the pandemic driving a dramatic increase in industrial property values around the world.

Investors are also chasing the long leases being taken up by major companies as they commit to automated warehouses worth hundreds of millions of dollars.

This article originally appeared on www.theaustralian.com.au/property