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GIC buys warehouse operator in Europe’s largest real estate deal of 2016

GIC buys warehouse operator in Europe’s largest real estate deal of 2016

Singapore’s sovereign wealth fund GIC has acquired P3 Logistic Parks in a deal which values the business at €2.4 billion, making it the largest European real estate transaction this year.

The giant sovereign wealth fund, which has assets under management of more than €90 billion, said on 7 November it signed a definitive agreement to acquire P3 from TPG Real Estate and its partner, Quebec-based property investor Ivanhoé Cambridge.

Since P3’s acquisition in 2013 by TPG Real Estate and Ivanhoé Cambridge, the group has grown into one of Europe’s largest integrated logistics platforms and developers with a 3.3 million square metre portfolio.

Commenting on the deal, CIO of GIC Real Estate, Lee Kok Sun, said: ‘We believe P3’s strong growth will continue given its diversified, income-producing portfolio and substantial land bank. We are confident of the long-term potential of the European logistics sector, and look forward to expanding this attractive platform with the very capable P3 management team.’

He added that GIC’s extensive experience of investing in logistics globally also allowed it to add value to the partnership.

Anand Tejani, partner at TPG Real Estate, the real estate platform of the €63 billion private investment firm TPG, added that under its ownership, the business had undergone a period of significant change.

‘P3 has more than doubled in size and has strengthened its asset management, property management and development capabilities. We believe P3 will be well positioned to continue its growth under GIC’s ownership.’

Over the last three years, P3 completed a series of add-on acquisitions across European markets, more than doubling the size of the portfolio, which now includes 163 warehouses in 62 locations and across nine countries. The key countires are France, Germany, Czech Republic, as well as Poland.

Currently, 11 new sites are under construction, with 300,000 square metres of approved development scheduled by the end of the year. The company also has a land bank representing up to 1.4 million square metres of development potential.

The transaction is subject to regulatory approval and is expected to close by the end of 2016.

In July GIC announced that it invested in a real estate fund managed by ADF Asset Management, which specialises in South Korea’s logistics sector

GIC was established in 1981 and manages Singapore’s foreign reserves. The fund has assets under management which ‘well exceed’ $100 billion (€90 billion) but does not disclose the full size of its assets.

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