What’s Going On Here?

American private equity titan Blackstone announced its purchase of several US warehouses from Singaporean logistics firm GLP, paying $19 billion in the biggest private real estate deal ever.

What Does This Mean?

• Blackstone’s already one of the world’s largest property owners, and snapping up more warehouses will almost double its US industrial footprint;
• They’ll mostly be used for e-commerce logistics, which is growing continually;
• The valuations of publicly listed warehouse owning firms rise 30% this year.

Why Should I Care?

The bigger picture: Nothing happens in a vacuum.

• E-commerce illustrates the chain of knock-on events that affects several industries beyond retail;
• As online retailers succeed while traditional brick and mortar retailers struggle, mall owning real estate companies may struggle too, losing income as tenants;
• Real estate companies that own industrial warehouses, may thrive as demand rises;
• Investors aim to stay ahead of these changes in order to generate profits.

For you personally: Blackstone doesn’t have to be alone.

• Property investing is considered relatively safe compared to the stock market – and is becoming more accessible to ordinary people;
• Real estate is typically a lot harder to move around, making its value less volatile
• (Comparison of British commercial real estate – residential investments:
  • Returns: 8% – 3%;
  • Prices growth: ∼ 0% – 6%.)

Content sourse: Finimize. (2019) Blackstone Goes Industrial. [Online] Available from: https://www.finimize.com/wp/news/blackstone-goes-industrial/ [Accessed 5 June 2019]