(Reuters) - Britain's Hansteen Holdings (HSTN.L) has agreed to sell its German and Dutch industrial property portfolios for 1.28 billion euros ($1.38 billion) to a venture between Blackstone Group LP (BX.N) and M7 Real Estate.
The price represents a premium of about 6 percent, or roughly 76 million euros, to the assets' valuations at the end of 2016, Hansteen said in a statement on Monday.
Hansteen's shares rose more than 6 percent, before paring gains to trade up 3 percent at 125.55 pence at 0850 GMT. They were the top gainers on London's midcap index .FTMC.
"This is a compelling opportunity to crystallise both the revaluation gains from these German and Dutch assets achieved by our active asset management and the gains from foreign exchange movements," Hansteen joint chief executives Morgan Jones and Ian Watson said.
Last year, the industrial market outperformed all other European real estate sectors, including offices and retail, data from property consultant CBRE (CBG.N) showed, as the sector benefited from higher demand for warehouses from retailers expanding their online operations.
Over the fourth quarter, European commercial real estate deals reached a record high of 86.8 billion euros, boosted largely by a buoyant Germany market and growth in the Netherlands, according to the data.
Hansteen, a UK real estate investment trust, said that the sale was expected to complete before the end of June and that it was advised by property consultant JLL (JLL.N).
The sale leaves Hansteen with its UK business, where the market has seen some turbulence after Britain voted to leave the European Union.
However, Hansteen said it had not noticed any significant effect on demand for industrial space following the June 23 vote.
"Across the UK, we are experiencing pockets of rental growth and shorter incentives being offered to tenants as demand intensifies," the company said.
Reporting by Esha Vaish in Bengaluru; Editing by Jason Neely and Alexander Smith