Property giants in hunt for Blackstone’s $3.5bn industrial portfolio

The thinking is that Blackstone will probably sell rather than float the assets. Picture: Bloomberg

Australian listed property groups including Charter Hall, Dexus, ESR and Centuria are likely to have already made approaches about buying Blackstone’s $3.5bn portfolio of Australian industrial properties, sources say.

Singaporean investors such as Maple Tree and Capitaland are also expected to be in the mix.

DataRoom understands that the official dual-track process, where a sale or float of the portfolio will be considered, will launch on around January 14 through investment banks JPMorgan and Morgan Stanley.

The thinking is that Blackstone will probably sell rather than float the assets, but equity market investors have never been more interested in businesses that offer the opportunity to collect a generous yield in a low interest rate environment.

Australian listed property groups themselves are eager to boost their portfolios to satisfy the voracious appetite of their investors for more assets offering strong returns.

It is expected that both Charter Hall and Dexus would embark on any transaction in partnership with their wholesale investors.

Dexus would be likely to bid for the assets with the Singapore sovereign wealth fund GIC.

Other possible contenders for the portfolio are Lendlease, GPT, Mirvac and Stockland, although some suspect that Mirvac and Stockland would be outpaced by other rivals.

The big end of town in the real estate industry is turning its attention to the Blackstone offering after AMP suspended its process for the sale of the AMP Capital Real Estate platform which may have been worth about $1bn.

It is understood that the sole focus of JPMorgan and Morgan Stanley will be the float, while real estate advisory firms Eastdil Secured and JLL will assist with finding trade buyers.

The IPO plans by Blackstone were flagged by DataRoom in September. It comes as the New York-based private equity firm also weighs a divestment of its $700m Fife Capital-managed portfolio of properties in the same sector.

The float, should it occur, would likely be the largest for 2021 in the real estate industry, with other smaller opportunities also in the wings.

Industrial property remained in strong demand during 2020 after it remained relatively unscathed from trading disruptions linked to COVID-19, with booming conditions for internet shopping.