, including a strategic partnership with Blackstone in Europe, to accelerate its international fund and investment management strategy.
Upon completion, third-party Assets Under Management (AUM) will increase from R4.7 billion to approximately R23 billion, with revenues from fund and asset management expected to more than double in the next 12 to 24 months.
Burstone is a fully integrated international real estate business with R42 billion gross asset value (GAV) under management.
The group listed on the Johannesburg Stock Exchange (South Africa) in 2011 and currently operates in South Africa, select European markets and Australia.
In the largest transaction, Blackstone will acquire an 80% interest in Burstone’s Pan-European Logistics (PEL) platform, valued at €1,022 million (R20 billion), with Burstone retaining a 20% co-investment and continuing to manage the assets.
This transaction is subject to regulatory and shareholder approvals.
The PEL portfolio, amassed since 2017, includes 32 logistics properties in key European urban centers, primarily in Germany, France, and the Netherlands. The 1.2 million sqm portfolio is 97% occupied by over 110 tenants, mainly in the third-party logistics sector.
Burstone and Blackstone plan to expand the PEL portfolio by focusing on industrial and logistics properties across core European markets.
“We have indicated for a while that we have been seeking strategic partnerships in Europe and we are delighted to partner with Blackstone.
"This partnership deepens our already strong relationship with Blackstone’s operational and management team, who know our European team well from previous successful collaborations,” said Andrew Wooler, CEO of Burstone Group.
The transaction will help Burstone deleverage its balance sheet and optimize capital allocation.
James Seppala, Head of European Real Estate at Blackstone, said: “Logistics is one of our highest conviction investment themes globally. This exceptionally well-located portfolio of assets in core logistics markets across Europe is additive to our existing portfolio and allows us to continue to capitalise on customer demand, including as a result of growing e-commerce penetration trends across the continent.”
Burstone is also negotiating to acquire a 25% co-investment stake and ongoing management of a €170 million German light industrial platform, expected to be significantly earnings accretive.
Burstone’s 50/50 JV with Australian Irongate Group is growing its management platform and has announced a new industrial joint venture with a leading global alternative asset management firm.
An initial A$200 million of equity has been earmarked, with plans to upsize upon successful deployment. The JV will acquire an initial portfolio of industrial and logistics assets in Queensland, with a total purchase consideration of approximately A$140 million.
In South Africa, Burstone is negotiating with cornerstone investors to build an SA Core Plus platform, using a portion of its South African assets to seed this new venture.
“Burstone’s commitment to expanding our fund and investment management model combines traditional real estate asset yields with additional upside potential from our comprehensive management capabilities, including fund, investment, asset, and development management. This hybrid model supports our strategy of maximizing returns on capital deployed while leveraging our scalable platform to drive operational efficiencies,” said Wooler.
Strategic Highlights:
Partnership with Blackstone on PEL Portfolio
Significant reduction in the Group’s Loan-to-Value (LTV) ratio by 12.5%, bringing it down to approximately 33.5%
Increase in dividend payout ratio from 75% to between 85% and 90%, effective from the interim reporting period 1H25
Immediate positive earnings impact of 1.3% based on historical FY24 distributable earnings
Enhanced access to capital and resources, driving operational efficiencies and boosting profit margins
Increased diversification across core markets and tenant mixes
The net proceeds of approximately €250 million (R5 billion) from the proposed transaction will be allocated to reducing debt, investing in growth opportunities within the Group’s Australian and German platforms, supporting further growth in the PEL platform, and increasing the dividend payout ratio.
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