Goldman Sachs has launched the securitisation of a £680m senior loan to Logicor, Blackstone’s European logistics platform, which is secured by a 42-strong industrial property portfolio throughout the UK.
The transaction, dubbed Logistics UK 2015 plc, has six tranches, the most junior of which is not offered. The capital structure, now confirmed by Fitch Ratings, is comprised as follows:
Class Expected rating LTV
- £312.55m [AAA/Aaa]; 33.4%
- £67.45m [AA/Aa2]; 40.6%
- £67.45m [A/A2]; 47.8%
- £60.8m [BBB/Baa2]; 54.3%
- £76m [BB-/Ba2]; 62.4%
- £61.75m [B/B1]; 69%
Logistics UK 2015 plc has an expected maturity of August 2018 with two one-year options. Goldman’s 5% retention will be held in loan format prior to the securitsation, therefore, the transaction’s £646m total reflects 95% of the original loan.
The ultimate sponsors are two of Blackstone’s opportunity funds: Blackstone Real Estate Partners Europe III and Blackstone Real Estate Partners VII.
Fitch Ratings and Moody’s are expected to rate the deal. Goldman Sachs is sole arranger lead manager and bookrunner, while ING Bank joins as co-manager and also the provider of the €50m liquidity facility. Wells Fargo Bank’s London Branch will be delegate primary and special servicer.
Based on an exit 69% LTV, the 42 UK logistics was valued at £936.2m ahead of the securitisation. The net operating income is £60m per annum. The portfolio is 98% occupied. The weighted average lease to break and expiry is 8.2 years and 9.6 years, respectively.
Goldman Sachs extended the three-year senior loan, maturing in August 2018 but with two one-year extension options, priced at 204 basis points over three-month LIBOR, according to the Fitch pre-sale report.
The industrial property portfolio has been piecemeal acquired by Blackstone and later Logicor, after it was formed in 2012, in four separate UK industrial portfolio transactions since last 2011 from Oaktree Capital Management, SEGRO, ProLogis and London and Stamford.
These four logistics portfolio acquisitions by Blackstone/Logicor are as follows:
- In April, the £388m acquisition of a 16-strong portfolio of warehouse properties from an Oaktree-led joint venture with Anglesea Capital in April. Oaktree acquired the assets as part of a wider loan acquisition – dubbed the Fusion portfolio – last June in a recapitalisation strategy from Lone Star’s Eurohypo Project Acorn NPL buy from Commerzbank. The assets in this pool are located in core logistics markets close to major urban centres across the UK, including Birmingham, Leeds and Oxford. The 120,772 sq m Sherburn Distribution Park near Leeds comprises five of the 16 buildings. The properties are leased to a diverse range of tenants such as Arcadia, B&Q, The Co-Operative, Debenhams and Unipart.
- Last November, Logicor acquired portfolio of six UK logistics properties and a smaller regional warehouse from SEGRO for £153.3m. At the time of the transaction last November, the portfolio was fully-let and produced an annual rent of £9.3, due to increase to £11.2m once rent-free periods and fixed uplifts over the next five years come into effect. The 185,331 sq m sub-portfolio acquired from SEGRO comprises logistics warehouses formerly part of the Logistics Property Partnership joint venture located in Bardon, Bicester, Maidstone, Sheffield, and Swindon (two warehouses), and a smaller warehouse in Norfolk purchased by SEGRO as part of a portfolio transaction in July 2014.
- In November 2012, Blackstone acquired the 13-strong Teal portfolio for £214m ProLogis. See CoStar News’ story at the time here.
- Finally, back in December 2011, Blackstone acquired the 18-strong Triangle portfolio, majority predominantly owned by London & Stamford, for £300m. Anglesea Capital owned a 6% stake.
Pricing guidance is expected to follow next week.
The Fitch pre-sale reveals that the 10 largest assets are:
- a 716,988 sq ft distribution warehouse in Rugeley, purpose built in 2009 for Amazon on a 15-year lease expiring in August 2026, valued at £52.83m;
- a 615,262 sq ft distribution warehouse is let to Polestar Print UK Ltd in Sheffield on lease expiring in December 2034, valued at £50.78m;
- two properties, of 508,640 sq ft and 490,074 sq ft, in Brackmills Industrial Estate in Northampton are occupied by Travis Perkins. The leases expire in August 2027 and March 2029 respectively and are together valued at £98.6m;
- a 558,125 sq ft distribution warehouse leased to Goodyear Dunlop in Birmingham, expiring in March 2017. “Renewal probability is high given the tenant’s historical links to the area,” reported Fitch;
- a 451,002 sq ft distribution warehouse in the Daventry International Rail Freight Terminal (DIRFT) logistics park let to Eddie Stobart on a lease expiring in September 2022. The property is valued at £46.7m;
- a 802,741 sq ft B&Q distribution centre in Doncaster, the largest property in the portfolio, is valued at £46.56m;
- the Weybridge property, valued at £42.67m. Currently undergoing substantial renovation works in preparation for Amazon, which will occupy the building on a 10-year lease from October 2015;
- a modern 673,678 sq ft distribution centre in Barnsley let to ASOS, valued at £41.95m;
- the 396,182 sq ft Lymedale property let to New Look and valued at £37.21m;
- The Glasshoughton property, purposely built for Teva UK pharmaceuticals whose lease espires in December 2028, is valued at £34.13m.