Blackstone Group buys logistics real estate fund for $588m
05:19, 21 January 2022
Individual investors have bagged hefty returns from their subscription in a European logistics real estate fund which was acquired by US-based private equity firm Blackstone Group for €520m ($588.9m) on Thursday amid booming demand for logistics and e-commerce solutions in the post-pandemic era.
Singapore-based private market exchange ADDX used blockchain technology and smart contracts to fractionalise and tokenise units of the Elite Logistics Fund I to reduce the minimum investment size to €20,000 from €1m, said the press release.
Individual accredited investors on ADDX who had subscribed to the fund in 2020 have received 98% of the proceeds from the sale to Blackstone, said ADDX. Elite Logistics Fund I achieved annualised returns of more than double its 12% per annum target following the sale of all 18 properties to Blackstone, the exchange added.
Logistics assets sought after
The logistics real estate fund was invested in logistics warehouses in the UK, Poland, Germany, Czech Republic and Spain and its tenants included the likes of DHL, Pepsi, FM Logistics, Fiege, Havi Logistics and Next.
“With the pandemic, the demand for space in logistics and e-commerce facilities skyrocketed, as supply chain disruptions prompted companies to increase inventory levels for food, essential goods and other consumer products, to ensure they could meet demand consistently,” said Enoch Tan, portfolio director of Elite Logistics Fund I.
“Even prior to the pandemic, we were bullish about logistics because of the broader expansion of the e-commerce industry and new demand for space in the UK arising from Brexit,” added Tan.
Logistics real estate sectors expected to grow further
Tan said that logistics assets are hugely sought after due to their consistently low rates of rental delays and defaults.
“In contrast, rent collection for retail and office space plummeted to under 50% across Europe,” said Tan.
ADDX said that the e-commerce and logistics real estate sectors were expected to grow further, citing a report by Prologis Research, which projected that the global e-commerce penetration rate is to rise to over 25% in 2025 from around 15% in 2019.