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Blackstone Group LP is buying U.S. industrial warehouse properties from Singapore-based logistics provider GLP for $18.7 billion, in what the companies billed as the largest private real estate transaction globally.

The deal by the world’s largest manager of alternative assets comes when investors are spending billions of dollars to snap up logistics assets as a surge in e-commerce activity spurs demand for delivery and warehouse services.

Blackstone said the overall transaction totalled 179 million square feet of urban logistics assets, nearly doubling the size of its U.S. industrial footprint.

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“Logistics is our highest conviction global investment theme today, and we look forward to building on our existing portfolio to meet the growing e-commerce demand,” said Ken Caplan, global co-head of Blackstone Real Estate.

GLP had scaled up its U.S. business over the past four years to become the second-largest logistics player after Prologis Inc.

Its clients include Amazon.com Inc, Walmart , Adidas AG and L’Oreal SA.

Stephanie Lau, senior analyst at Moody’s, said that GLP’s U.S. assets were likely in locations where supply was constrained, making them more attractive, while high occupancy rates was another positive.

Property-related deal-making activity has picked up globally in recent years, with $353 billion worth of transactions announced last year, according to data from Dealogic.

Including the latest deal, Blackstone said it had acquired over 930 million square feet of logistics assets globally since 2010.

Blackstone will split the GLP assets between two funds, with its global opportunistic BREP strategy fund taking 115 million square feet for $13.4 billion and Blackstone Real Estate Income Trust (BREIT) taking 64 million square feet for $5.3 billion.

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GLP TURNS TO ASIA

Two years ago, Singapore-based GLP was acquired by management, backed by a China-led consortium, for $12 billion in Asia’s then largest private equity buyout.

While it will maintain a presence in the United States after the Blackstone deal, the company’s balance will shift to Asia, where it had 212 million square foot of space in China, according to an October 2018 report by Moody’s, with another 56 million square feet in Japan.

Financing activity in the logistics sector is picking up more generally in Asia.

Asian logistics property developer ESR Cayman Ltd, a company backed by private equity firm Warburg Pincus, could launch a Hong Kong IPO of up to $1.4 billion this week, two people told Reuters – although it delayed Monday’s planned launch due to volatile markets.

GLP has $64 billion of assets under management in its property and private equity funds. Its real estate fund platform has assets offering a combined 785 million square feet, the company said on Monday.

Citigroup, Eastdil Secured and Goldman Sachs advised GLP. Bank of America Merrill Lynch, Barclays , Deutsche Bank, JPMorgan Chase and Morgan Stanley advised Blackstone. Kirkland & Ellis was legal counsel to GLP and Simpson Thacher & Bartlett was legal counsel to Blackstone.

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