Blackstone Group top bidder for ESR, German investor Allianz platform

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US-based investor Blackstone Group has emerged as the highest bidder for a 90 percent stake in the warehousing platform of Asia-focused logistics company ESR and German investor Allianz. The margin investor offered Rs 2,000 crore for the stake, knowledgeable insiders said. Blackstone has passed the likes of GIC and the Ontario Municipal Employees Retirement System to become a finalist for the quota, sources said. While Allianz exits its investment by selling its 50 percent stake, ESR sells 40 percent and owns 10 percent in the platform.

“They (ESR and Allianz) have finalized Blackstone. The agreement is expected to be signed soon. Total value of assets $450-475 million,” they added.

The platform, which was built in late 2018, has eight assets with an area of ​​10.5 million square feet (MSF). The 50:50 partnership between ESR and Allianz planned to invest $1 billion in the project. The sources said the platform conducted the bidding process through Anarock Capital.

Blackstone has not provided any comments. Emails sent to ESR and Allianz elicited no response until time to go to print.


a big deal

  • Allianz sells 50% stake, ESR 40% and owns 10% in the platform

  • Total assets value: $450-475 million

  • The platform, which was built in late 2018, has eight assets with an area of ​​10.5 million square feet (MSF).

  • The 50:50 partnership between ESR and Allianz planned to invest $1 billion in the project

  • Blackstone plans to expand its storage portfolio by 2.5x to 100 msf, from the current 40 msf

Blackstone is looking to expand its storage portfolio by 2.5x to 100 msf, from the current 40 msf, in the next three to five years, recent media reports said. By Rahul Pandit in 2022.

In 2021, funds managed by Blackstone acquired Embassy Industrial Parks from Warburg Pincus and Embassy Group for an enterprise value of $700 million. Blackstone also has a joint venture with Hiranandani Group to store assets in the country. Since its inception, Horizon has added a portfolio of 3.7 mmcf to its existing portfolio and built another 5 ms with a capital expenditure of Rs 4,500 crore.

Blackstone has a global warehousing portfolio of 1.2 billion square feet: that’s 37 percent of its total real estate portfolio. Capitalization rates, which help investors value real estate investment in storage properties, have fallen from 8-8.5 percent a few years ago to 7 percent now, as more investors bet on them, and bankers and investors get caught up in such real estate.

Advisers said more institutional investors are betting on growth in the warehousing sector, which has limited top-tier inventory now. Those investors are trading in lower returns for future growth, said the experts, adding that warehousing is growing faster than office real estate, and that inventory accounts for half of all office inventory in India.