Citi has financed Blackstone’s latest European logistics purchase as it continues to build a large book in the sector.
The US bank has provided a loan of £115m for the acquisition by Blackstone’s Logicor of £153.3m of UK warehouses. The five-year loan reflects a loan-to-value of 75% with a margin of slightly over 250 basis points.
The bank has been a prolific lender to the sector, which had attracted £18bn of investment up to the end of Q3 this year from private equity firms, sovereign wealth and traditional specialists because of its strong yield profile. It is thought that Citi could be warehousing loans in the sector for a possible securitisation next year.
The Logicor portfolio totals 185,331 sq m with assets in Bardon, Bicester, Maidstone, Sheffield, Swindon and Norfolk. The bulk of the portfolio was formerly part of the Logistics Property Partnership, a 50:50 joint venture between Segro and Moorfield, with the former buying the latter’s stake in July for £95.6m. It is fully let and generates annual net income of £9.3m.
It is the third loan Citi has agreed with Logicor this year. In September it lent the company €285m for the purchase of a 17 asset pan-European portfolio from SEB and six Spanish assets from Gran Europa and in June issued a €350m loan for the purchase of 17 assets in France and Germany from Foncière des Régions.
Citi also ventured into the logistics market with Oaktree Capital Management in June, backing them to buy a £200m UK portfolio that was previously owned by Rockpoint and Lehman Brothers.
A new European CMBS from Citi would be its first this cycle. Thus far European CMBS has been dominated by Bank of America Merill Lynch, Deutsche Bank and Goldman Sachs.