Blackstone's Billion-Dollar Plot Twist: Sells Warehouses, Grabs Power

Blackstone BX could be setting a new tone in UK real estate with a 1 billion sale of logistics warehouses to Tritax Big Box REIT Plc a deal that isn't just about cashing out, but staying in control. Under the agreement, Tritax will pay 632 million in cash, financed by a 650 million loan, and issue 375 million in new shares to Blackstone at 161 pence per share. That pricing represents a 13.5% premium to Tritax's Friday close, though below its EPRA net asset value of 188.17 pence. Once completed, Blackstone will own roughly 9% of Tritax, effectively turning a sale into a strategic partnership with the London-listed landlord.

Most of the assets changing hands were accumulated through Blackstone Real Estate Partners Europe VI a 9.8 billion fund closed in 2020 and reflect the firm's long-term bet on European logistics demand. James Seppala, Blackstone's European chairman, said the decision to take an ownership stake shows confidence in Tritax's growth strategy and market positioning. For Tritax, the acquisition lifts its loan-to-value ratio to 35% from 31%, prompting plans to offload about 300 million in properties over the next 18 months to bring leverage back toward the low end of its 30%35% target range.

The deal also signals how Blackstone is navigating a property market still adjusting to higher interest rates and limited liquidity. Publicly listed REITs, long trading below their asset values, have become fertile ground for private capital to strike complex deals. Blackstone has done this before most notably in 2013 when it exchanged a German residential portfolio for shares in Deutsche Wohnen. Now, with UK warehouses as the new trade chip, the firm could be setting the stage for another long-term position, even as it reportedly weighs a possible move on self-storage operator Big Yellow Group Plc.