TPG With Ivanhoe Buys Manager of 48 European Warehouses

TPG Capital and the real estate arm of Quebec’s state pension fund acquired 48 warehouses in Europe and development land from an affiliate of Arcapita Bank BSC to capitalize on growth in commerce.

TPG and Ivanhoe Cambridge Inc. of Montreal bought P3 Plc, which operates the warehouses with 1.46 million square meters (15.7 million square feet) of space and has about 590,000 square meters of land for development, the companies said today in an e-mailed statement. The assets are valued at about 760 million euros ($1 billion), according to a term sheet for P3’s planned initial public offering in London last year that got called off.

Industrial properties generated returns of 7.1 percent in 2012, compared to 5.5 percent for all commercial real estate, Investment Property Databank Ltd. said in a report published on Oct. 7. That’s attracted private-equity firms like Blackstone Group LP, whose LogiCor warehouse unit plans to double the size of its holdings over the next two years.

“Everything we touch goes through warehouses,” P3 Chief Executive Officer Ian Worboys said in a telephone interview. “They don’t require big capital expenditure and the tenants stay longer; they aren’t as flash as offices or retail but for an investor you get very good returns.”

Court Filing

Arcapita said in a U.S. bankruptcy court filing last month that it had lined up a buyer to pay 111.5 million euros for its interest in the European warehouse business. The sale price was 105 million euros in cash plus repayment of as much as 6.5 million in loans from Arcapita. The total price paid by TPG and Ivanhoe Cambridge was higher than reflected in the filing, said a person with knowledge of the deal who asked not to be named because the details are private.

Arcapita, based in Bahrain, filed for Chapter 11 protection in New York last year and came out of bankruptcy last month after getting a $350 million loan from a Goldman Sachs Group Inc. affiliate.

TPG and Ivanhoe Cambridge said they plan to invest additional money in P3.

“P3 is well-positioned to benefit from the positive macro trends driving the current growth” in European warehouse demand, Anand Tejani, a TPG partner, said in the statement.

Ivanhoe Cambridge is the property arm of public pension fund manager Caisse de Depot et Placement du Quebec. P3, also known as PointPark Properties, is based in Prague. TPG Capital, the Fort Worth, Texas-based private-equity firm started by David Bonderman and James Coulter, bought the Woolgate Exchange in the City of London financial district in January for 265 million pounds ($424 million) in partnership with Ivanhoe Cambridge.

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