Andrew Wooler
Burstone CEO
Burstone Group, previously known as Investec Property Fund, recently announced that shareholders unanimously approved a new strategic partnership with Blackstone, the world’s largest alternative asset manager. The partnership grants Blackstone an 80% stake in Burstone’s Pan-European Logistics (PEL) platform, a move expected to enhance Burstone’s operational and financial capabilities in Europe significantly. Burstone will retain a 20% co-investment in the PEL platform, which they will continue to manage.
Initially proposed in September, this partnership is anticipated to expand Burstone’s third-party assets under management (AUM) from R4.7 billion to nearly R23 billion. With Blackstone’s 80% acquisition of the PEL platform, valued at approximately R20 billion, Burstone forecasts its fund and asset management revenues to more than double over the next one to two years. Burstone CEO Andrew Wooler expressed optimism, noting the strong shareholder support and the promising financial impact on Burstone’s earnings as this partnership develops.
Wooler highlighted Burstone’s intent to leverage its infrastructure and strategic initiatives for long-term growth, emphasizing its joint venture with Blackstone as a pivotal step in the group’s expansion strategy. Wooler explained that working with Blackstone offers immediate financial benefits and aligns Burstone with a powerful global partner, setting the stage for substantial portfolio growth in the years to come. In addition to its European operations, Burstone is actively expanding in Australia through its 50/50 venture with Irongate, further strengthening its portfolio and investment scope.
The PEL portfolio, assembled by Burstone in 2017, consists of 32 high-quality logistics properties located in key urban areas across seven European countries, with significant holdings in Germany, France, and the Netherlands. Proceeds from this partnership will support Burstone’s strategic goals, including debt reduction. The company plans to allocate R4 billion toward debt repayment, lowering its loan-to-value ratio by 12.5% to 33.5%. The partnership will also yield immediate funds, with €250 million (R5 billion) going directly to Burstone’s capital reserves. Additionally, Burstone aims to increase its payout ratio to 85-90%, up from its current 75%, starting in the first half of the 2025 fiscal year.
Blackstone’s expertise and extensive resources, including over $1 trillion in AUM and a substantial real estate portfolio, position it as an ideal partner for Burstone. With assets spread across 230 portfolio companies, Blackstone’s scale and influence are expected to significantly benefit Burstone’s PEL platform. Wooler emphasized that Burstone’s commitment to this collaboration is part of a broader strategy to expand in key international markets while strengthening the company’s capital structure.
Burstone, which manages a gross asset value of R42 billion (€2.1 billion), operates in South Africa, selected European markets, and Australia. Since listing on the Johannesburg Stock Exchange (JSE) in 2011, Burstone has continued to grow its valuation, which currently stands at R7.7 billion. This growth is reflected in Burstone’s share performance, with a 31% increase over the past year, including a nearly 10% rise since the initial partnership announcement in September.
With this strategic partnership, Burstone is well-positioned to enhance its asset portfolio and operational reach in Europe and beyond, leveraging Blackstone’s resources and expertise to support its ambitious growth trajectory.