Blackstone has significantly increased the size of a loan it is taking out to refinance a portfolio of UK last-mile logistics assets owned by one of its biggest platforms, following strong demand from debt investors. 

Investors bought £1B of commercial mortgage-backed securities secured against a 10M SF, £1.6B portfolio of UK assets owned and managed by Blackstone’s Mileway last-mile platform. The original intention was to sell just over £600M of bonds, but demand from investors led Blackstone to upsize the debt issuance. 

The loan being securitised was originally provided by a group of banks led by Barclays and had an interest rate margin of 1.85%, according to a ratings report from KBRA. The bonds were bought by a group of 25 investors. 

The securitisation is part of a wider refinancing of Mileway’s debt by Blackstone, one of the largest real estate refinancings ever undertaken in the UK and Europe. 

In June, investors bought £650M of CMBS bonds backed by the income from a portfolio of 184 Mileway UK properties. And a month later, Blackstone raised more than €6.5B (£5.6B) of unsecured debt for Mileway to refinance previous predominantly secured loans. 

Mileway had a portfolio of 1,584 properties in 10 countries across Europe at 30 June, the KBRA report said. That includes 664 in the UK. 

Blackstone set up the platform in 2019, creating a company around urban logistics assets it had been buying across various funds. It recapitalised the business at a value of €21B in 2022, at which point it owned 1,700 assets. 

The portfolio secured by the new £1B loan comprised 141 properties totalling 10M SF, KBRA said. About 44% of the properties are located in the north, 32% in the south east and 16% in the Midlands, with occupancy at 94%. 

KBRA said rents for the portfolio are about 14% below market averages, offering the possibility of increases, with 59% of the leases expiring before 2028. The loan is for two years with the possibility of three one-year extensions.