(Bloomberg) -- Blackstone Inc. plans to merge a pair of warehouse landlords it took private to create one of the UK’s largest owners of industrial property, a move that could potentially pave the way for the entity’s eventual sale or an initial public offering.

The private equity firm will integrate the management of St Modwen and Industrials REIT, together with assets acquired through 25 other deals, to create a company called Indurent, according to a memo sent to staff on Monday. 

The company will own more than 200 properties spanning about 26 million square feet, a spokesperson confirmed. That would make it one of the largest owners of UK logistics properties behind Segro Plc, which has a UK portfolio spanning almost 30 million square feet, and Tritax Big Box REIT. 

Creating a large integrated platform for the PE firm’s UK warehouse investments helps position the business for a future disposal. That’s because major sovereign wealth and pension funds looking to increase their exposure to warehouse investments also need management teams to operate them. An IPO could be another option. 

Read More: Blackstone’s Warehouse Bet Becomes One of Its Best Trades Ever

The move echoes Blackstone’s previous ventures in UK and European warehouse properties, starting with Logicor, which it established, scaled and sold to China’s sovereign wealth fund. It repeated the same approach with Mileway, an owner of so-called last-mile urban warehouse properties, which it recapitalized in 2022 in the largest ever European real estate deal. 

Blackstone has poured cash into UK warehouses, investing £2.1 billion ($2.6 billion) in the development pipelines of St Modwen and Industrials REIT since their acquisition. The firm is betting on the transformation of global supply chains to drive further growth in warehouse rents, which have soared in recent years.

“UK logistics is a high conviction theme for Blackstone given our portfolio’s exceptionally strong performance and favorable long-term fundamentals in the sector,” Blackstone’s head of European real estate James Seppala said. “As a pure-play UK logistics company with an exceptional team, Indurent will enable us to continue to capitalize on opportunities in the sector and create value for our investors.” 

Publicly traded UK landlords have suffered a series of shocks that have spooked REIT investors, damping share prices even as asset values have held up better than expected. That’s prompted a wave of consolidation in the sector, with firms like Blackstone taking several landlords private. At the same time landlords have responded by launching a series of mergers designed to cut costs, gain scale and maintain banking relationships. 

Read More: Tritax Offers to Buy UK REIT in $1.2 Billion All-Share Deal

Tritax, which currently trades at about a 13% discount to the value of its assets, announced Monday that it plans to acquire smaller rival UK Commercial REIT. 

(Updates with mergers among listed property firms in the last two paragraphs.)

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