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TPGRE and Ivanhoé Cambridge Sell P3 for €2.4 Billion | TPG
TPG Real Estate and Ivanhoé Cambridge Sell P3 Logistic Parks for €2.4 Billion
“Starting with a focused investment strategy, we identified P3 as a company with outstanding potential and worked together to achieve outstanding growth and operational excellence. We are very proud of what we have accomplished together and we anticipate that P3 will continue to thrive under GIC’s ownership.”—Anand Tejani, Partner at TPG Real Estate.
TPG Real Estate (TPGRE) and Ivanhoé Cambridge have signed a definitive agreement to sell P3 Logistic Parks (P3), a leading European owner, developer, and manager of logistics properties, to GIC, Singapore’s sovereign wealth fund. The transaction values the business at €2.4 billion, making this the largest European real estate deal of 2016.
TPGRE and Ivanhoé Cambridge jointly acquired P3 in 2013. Under their ownership, P3 grew to become the largest independent fully integrated logistics platform in Europe, offering in-house leasing, property management, asset management, development, and investment capabilities. Over the last three years, P3 has completed a series of add-on acquisitions in key European markets, more than doubling the size of the portfolio, which now includes 163 high-quality warehouses in 62 locations across nine countries.
Strategic, platform-based investment
TPGRE is TPG’s dedicated real estate investment platform, which includes both TPG Real Estate Partners (TREP), TPGRE's equity investment platform, and TPG Real Estate Finance Trust (TRT), the firm's debt origination and acquisition platform. Collectively, the two platforms manage assets in excess of $7 billion. TPGRE’s investment strategy is based on identifying real estate platforms in attractive sectors that have strong potential for growth and development, often as part of complex executions.
TPGRE was an early investor in the European logistics sector, having identified growing secular demand for logistics and warehouse space, driven in part by the rise of e-commerce. Supply of such properties was limited, and TPGRE saw great potential in P3, whose strong asset management and development platform created the opportunity to build scale by consolidating additional logistics assets throughout Europe.
Driving growth through refined focus
TPGRE oriented P3’s strategic focus toward expansion in Europe's core logistics markets. This included an accelerated program of development as well as targeted acquisitions of income-producing assets. In the time since TPGRE acquired P3 in 2013:
- TPGRE led 6 add-on acquisitions that more than doubled the size of the platform
- The company developed more than 600,000 square meters of space, accounting for close to 20% of the portfolio
- The P3 portfolio grew from 48 to 163 properties
- Portfolio assets expanded from 1.4 million square meters to more than 3.3 million square meters
- Tenant relationships grew from 97 to more than 300
- The P3 team expanded from 50 to more than 130 professionals, reinvigorating the company’s asset management capabilities
Poised for future success
With TPGRE’s support, P3 executed targeted growth strategies that significantly improved portfolio quality and critical scale in core markets—P3 now has more than 20 percent local market share across roughly 60 percent of its portfolio. These improved profitability, with the EBITDA margin increasing 600 basis points and EBITDA growing 3.5 times since the acquisition in 2013.
Additionally, TPGRE helped P3 expand its client base by focusing on growing markets such as e-commerce and last-mile logistics, hiring the former head of Amazon logistics for Southern Europe to bring in additional expertise. SInce 2013, P3’s customer base has increased threefold, demonstrating the strong and growing demand for premium logistics space.
Category: Wealth management