Prologis hunts down Blackstone’s €21 billion warehouse portfolio

Prologis, the world’s largest warehouse owner, has made an offer to purchase Blackstone’s logistics real estate portfolio in the largest private real estate deal ever in a sector where the Covid-19 pandemic and the rise of online shopping have boosted values have sharp.

Prologis has a no-obligation offer of just over $21 billion.

According to one of the people, the company now has about six weeks to complete an offer that meets a number of conditions set by the funds selling Mileway.

Warehouses have been a winning bet over the past two years, in which the proportion of sales made online has surged across the continent while the coronavirus has forced shoppers to stay home.

The disruption to supply chains caused by the pandemic, the closure of the Suez Canal by the container ship Ever Given and more recently, Russia’s invasion of Ukraine has prompted companies to stockpile more materials.

Prologis shares are more than 60 percent higher than before the pandemic, giving the company a market cap of nearly $120 billion.

Blackstone had hinted at this keep their exposure entered the sector last month as it announced plans to recapitalize Mileway, which is valued at $21 billion.

However, these plans included a 75-day “go-shop” period during which higher bidders could submit a bid. Of about 20 potential buyers approached by Morgan Stanley, the bank that led the process, eight were seriously looking for Mileway, but only Prologis made a non-binding offer, one of the people said.

Should Prologis submit a binding offer, the consortium behind the proposed recapitalization — which includes previous Mileway investors and a number of Blackstone’s own funds — could respond with a new proposal.

If Prologis’ offer, first reported by React News, is successful, it would give the company a dominant position in European “last mile” facilities – smaller warehouses that serve customers in cities.

Blackstone and Prologis declined to comment. Prologis hunts down Blackstone’s €21 billion warehouse portfolio

Adam Bradshaw

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