TPG, Ivanhoé Cambridge to sell P3 to Singapore’s GIC: Reuters

U.S. private equity investor TPG has agreed to sell its logistics property business P3 Logistics Parks to Singapore’s sovereign wealth fund GIC in a deal which values the business at 2.4 billion euros (US$2.65 billion), TPG said on Monday.

The deal was described as the largest European real estate transaction this year and comes as investors seek to exploit a boom in online retailing which is driving warehouse demand.

The sale, which is subject to regulatory approval and is expected to close by the end of 2016, gives GIC control of P3’s 163 warehouses in 62 locations, across nine countries.

TPG Real Estate and its partner Ivanhoé Cambridge, the real estate investment arm of the Caisse de dépôt et placement du Québec, bought the Prague-based business in 2013 and have grown its portfolio in recent years through a series of add-on acquisitions.

A source close to the company said business was valued at 760 million euros in 2012-13, when it owned 48 warehouses.

The 2013 sale was negotiated off-market, avoiding the traditional auction process at a time when P3’s parent company had been filing for bankruptcy protection in the United States.

Since then, the source said, P3 has completed six add-on acquisitions and developed 600,000 square metres of warehouse space, doubling the business in size and more than tripling profitability.

Now P3 holds a 3.3 million square metre portfolio and recently completed a 1.4 billion-euro (US$1.55 billion) long-term refinancing to support its growth strategy. It has 11 new sites under construction, with 300,000 square metres of approved development scheduled by the end of the year.

“GIC’s long-term investment strategy is closely aligned to our own approach as a long-term owner and developer of high quality assets,” said P3’s chief executive, Ian Worboys.

Eastdil Secured acted as adviser to TPG Real Estate.

By Pamela Barbaglia and Dasha Afanasieva

(Additional reporting by Anshuman Daga; Editing by Sinead Cruise, Greg Mahlich)

(This story has been edited by Kirk Falconer, editor of PE Hub Canada)

Photo courtesy of Ivanhoé Cambridge