GIC acquires European logistics firm for $3.7b

Sovereign wealth fund GIC is acquiring a European logistics property company for €2.4 billion (S$3.7 billion), making it the largest European real estate transaction this year.

It is also GIC's largest since it agreed to buy American warehouse owner IndCor Properties in December 2014 from Blackstone Group for US$8.1 billion (S$11.3 billion), according to Bloomberg data.

P3 Logistic Parks is one of Europe's largest developers and managers of logistics properties.

One of P3 Logistic Parks' properties in the Czech Republic. The company is one of Europe's largest developers and managers of logistics properties.
One of P3 Logistic Parks' properties in the Czech Republic. The company is one of Europe's largest developers and managers of logistics properties. PHOTO: GIC

P3's acquisitions over the past three years have allowed it to more than double the size of its portfolio, which now totals 3.3 million sq m, comprising 163 warehouses in 62 locations across nine countries.

GIC said it is confident of the long-term potential in Europe's logistics sector, given the significant growth in e-commerce as more businesses focus on direct-to-consumer home deliveries.

Mr Lee Kok Sun, chief investment officer at GIC Real Estate, said in a statement: "We believe P3's strong growth will continue, given its diversified, income-producing portfolio and substantial land bank."

GIC is acquiring P3 from TPG Real Estate and its partner Ivanhoe Cambridge. The transaction is expected to be completed by the end of the year, the four companies said in a joint statement yesterday.

They noted that P3 is "well placed to enter the next phase of its growth" with a land bank representing up to 1.4 million sq m of development potential. It has 11 new sites under construction.

"P3 is an ideal addition to GIC's value-driven, income-producing global logistics portfolio. GIC is already a substantial shareholder of many logistics platforms in Asia and the United States," added Mr Lee, in response to a separate query from The Straits Times.

"By working together with P3's strong in-house team, we can scale up through developments and acquisitions, as well as drive portfolio value through leasing and value-added refurbishments," said Mr Lee.

P3 is one of several investments made by GIC this year in the logistics sector.

In July, it invested in a real estate fund that acquired the Hyundai Logistics Distribution Centre in Incheon, South Korea.

In April, GIC announced that it had teamed up with Indonesia's PT Mega Manunggal Property to develop a portfolio of warehouses over the next three years.

The sovereign wealth fund also holds about 37 per cent interest in Singapore-listed Global Logistic Properties.

A version of this article appeared in the print edition of The Straits Times on November 08, 2016, with the headline 'GIC acquires European logistics firm for $3.7b'. Print Edition | Subscribe