Blackstone (NYSE:BX) announced this week that it had acquired a majority stake in the Greater Bay Area’s largest urban logistics park for $1.1bn. The park is in Guangzhou, China and the sellers were Guangzhou-based property developers R&F Group.
Justin Wai, a Blackstone Real Estate Managing Director based in Hong Kong, explained the rationale for the acquisition saying, “Logistics remains among our highest conviction global investment themes and we continue to see strong momentum driven by e-commerce trends. This transaction represents a continuation of Blackstone’s strategy to acquire high quality logistics located in tier-one distribution hubs with ongoing tenant demand.”
The purchase of a 70% stake in the 1.2 million sqm logistics park will expand Blackstone’s China logistics portfolio by approximately one-third. Following the transaction Blackstone will hold a total of 53 million sq. ft. of logistics real estate across 23 Chinese cities.
Blackstone’s plans for further development of the park include constructing additional cold storage facilities and institutional-quality warehouses to cater to rising demand in the region.
The Greater Bay Area is a fast-growing metropolitan area in Southern China made up of 11 cities including Shenzhen, Macau, Hong Kong and Guangzhou. The logistics park is 15km from Guangzhou International Airport and houses tenants across sectors that include third-party logistics (SF Express, YTO Express), e-commerce (Tmall, JD.com), pharmaceuticals (Sinopharm, CR Pharma), and telecommunications (China Mobile, China Telecom).
Blackstone Real Estate operates worldwide and has approximately $174bn in investor capital under management. Since 2010, Blackstone has acquired more than 1 billion sq. ft. of logistics globally in more than 200 distinct transactions.
In 2019, it announced the largest-ever private real estate transaction globally with the $18.7bn acquisition of the US logistics assets of Singapore-based logistics giant GLP.