24 Mar 2017

Blackstone, M7 seal €1.3bn Hansteen deal

As reported by David Hatcher, Head of news and finance at the Estates Gazette, on 24 March:

Blackstone and M7 Real Estate have agreed to buy almost the entire European portfolio of Hansteen for a total of €1.3bn (£1.1bn) in a quasi take-private deal.

The joint venture partners are rapidly expanding their presence in the urban logistics market and now have close to €1.6bn of assets under management. 

The appetite for the sector is driven in part by the opportunity to take advantage of the insatiable growth of e-commerce and last-mile delivery. 

For Hansteen, the deal represents around 61% of its portfolio by value and leaves the company with an almost exclusively UK-focused portfolio. It is expected by management that it will stay as such. It has a handful of assets in France and Belgium that will be sold in due course.

The price agreed represents a premium to book value of around 6%.

Hansteen will have a UK portfolio of £676.8m following the deal. Ian Watson, the company’s joint chief executive, said he would not be surprised if offers were forthcoming to take the company over. 

“It’s certainly possible we will get offers. I think we are in a period of unfamiliar territory in that suddenly urban logistics is the sexy sector, having for many years been under the radar. Clearly it is now in the sight of a lot of global and domestic players. It wouldn’t be a surprise if people picked up the phone and wanted to talk to us, but we are happy with the business as it is going forward,” he said. 

It is thought the jv is a likely  prospective buyer of the UK portfolio but the strengthening of the euro against sterling following the EU referendum meant that as a London-listed company a deal for Hansteen’s European assets was more straightforward in the first instance.

The value of the portfolio in sterling is around 30% higher than at the end of 2015.

“We have fought against the currency for several years and then, suddenly, post-Brexit the currency completely turned around. We thought this would be a perfect opportunity to create a chunk of value and lock in that currency benefit,” said Morgan Jones, Hansteen joint chief executive. 

A total of 36 staff responsible for the management of the German and Dutch assets will be transferring from Hansteen to M7. 

Unlike Blackstone’s big box logistics platform, Logicor, the jv vehicles will not employ anyone directly and will be asset-managed by M7. 

The duo has also bought two portfolios of Dutch and Danish assets from vehicles managed by M7 and invested into by HIG Capital and Oaktree Capital Management respectively for a total of around €250m, (see table). 

CBRE acted for Blackstone and M7 on its purchase of the Hansteen portfolio. JLL acted for Hansteen. Eastdil Secured advised on the formation of the Blackstone/M7 jv and its acquisitions in the Netherlands and Denmark. 

The Blackstone/M7 portfolio so far