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China’s CIC nears

YESTERDAY by: Judith Evans, Arash Massoudi and Javier Espinoza
China’s sovereign wealth fund is in late-stage negotiations to acquire Logicor from its private equity owner Blackstone, in a deal that would value the London-based warehouse property group at more than 12bn euros including debt.

China Investment Corporation and Blackstone could announce an agreement for the European-focused company as early as this week, according to people briefed on the discussions, who cautioned that the timing could still slip.

If agreed, it would rank as the second-largest European real estate transaction on record and the fourth-largest international Chinese takeover to date.

CIC won a bidding war against a joint venture consisting of two Singapore state funds, Mapletree Investments and Temasek, according to a third person involved.

Global Logistic Properties, a company controlled by Singapore’s sovereign wealth fund GIC, also lost out in the process, according to Estates Gazette, the UK specialist publication that first reported the deal.

Some of the parties that lost out have yet to be notified, suggesting there remains a possibility the deal could fall through.

One person who has worked with CIC on previous international deals said it would be highly unusual for the fund to be doing a deal of this size on its own.

CIC did not respond to a request for comment and Blackstone declined to comment.

Once a sleepy corner of the real estate market, warehouses — in particular those around major hubs and cities — have seen their value surge, driven by the rise of ecommerce companies such as Amazon and the attempts of traditional retailers to respond with their own online operations.

Blackstone used Logicor to consolidate Europe’s fragmented warehouse real estate market, following a model it used to develop and sell a similar business called IndCor in the US. Logicor now owns more than 630 properties across the continent, representing a total of 13m square metres of warehouse space.

Logicor has in recent years focused its expansion in mainland Europe, where online shopping is less developed than the UK. According to estimates by the company last year, Europe has 9bn sq ft of warehouse space compared with 13bn sq ft in the US.

About 40 per cent of Logicor’s enterprise value is made up of debt; Blackstone had been seeking bids of at least