Brookfield Asset Management has created a $3.5 billion global logistics platform by meshing together two portfolio companies. The New York- and Toronto-based firm revealed the name of its company would be IDI Gazeley, which would hold a combined 58 million square feet assets and land with capacity for another 68 million square feet of distribution facilities in North America, Western Europe and China. The company could grow even further, said Brookfield in an announcement, by “leveraging Brookfield's existing global customer relationships” and pursuing development.
Brookfield has launched the company on the back of its acquisition last June of Gazeley in Europe. It is joining the assets of that company with IDI, another large owner and operator of industrial distribution facilities across North America, of which Brookfield led the acquisition via two deals in December 2012 and October 2013.
Since those deals, IDI and Gazeley have added value to the business by completing a 690,000-square-foot development in Magna Park Baodi in northern China as the regional distribution hub for a sports retailer. It also has started work on a 938,000-square-foot national distribution center leased to a major UK supermarket retailer at Gazeley’s flagship UK development site, Magna Park Milton Keynes. In addition to other projects, the company is constructing a 671,000-square-foot facility for an e-commerce firm at Southpoint Business Park in Indianapolis and a 600,000-square-foot distribution center for a toy retailer in Paris.
Jay Cornforth, global head of industrial at Brookfield Property Group, added that the creation of the company was “a natural evolution” of its emerging logistics business and would create synergies. “This move will be particularly helpful to our customers around the world who will benefit from a greater choice of assets and locations globally,” he said. Collectively, IDI Gazeley will own and operate a global industrial property portfolio across nine countries including the US, Canada, UK, France, Germany, Italy, Spain, Mexico and China.
Ric Clark, chief executive officer of Brookfield, said: “The collective brand will have scale, experience and the backing of a strong parent. We intend to grow the platform by leveraging global customer relationships, pursuing attractive opportunities in key markets and developing our premier land bank.”
Brookfield is not the only company that has been active in building a logistics business and gaining additional exposure to the sector. The Blackstone Group, for example, created a European business called LogiCor in 2012 and last year recruited Mo Barzegar to run it. Barzegar was most recently the managing director for Europe at AMB Property. The firm has a comparable business in the US called IndCor, but it has not joined the two together into one brand.
Meanwhile, TPG Capital and Ivanhoe Cambridge made a big play into European logistics last year by buying ParkPoint Properties, an affiliate of Arcapita Bank with 15 million square feet of space.