Brookfield Property Partners has put part of its logistics platform IDI Gazeley up for sale. Media reports have suggested that the Toronto-based asset manager is seeking to sell the European part of its logistics business for around €1.5 billion, but PERE understands that this figure is “low”.
Last month, PERE revealed that Brookfield was seeking fresh debt for the business and had appointed investment bank Morgan Stanley ahead of a potential sale – though the firm has yet to announce details of the refinancing.
As predicted then, Brookfield has followed that step with the appointment of CBRE to join Morgan Stanley to advise on an official sale process. Sources close to the deal, however, have said the sale will not go ahead if the desired asking price is not met. It is also understood that Brookfield has yet to receive any formal bids.
Appetite for market share in European logistics is strong at present, particularly from Asian investors, a trend which suggests potential buyers from the region will be closely monitoring the IDI Gazeley situation.
Earlier this month, Blackstone sold its European logistics platform, Logicor, to Chinese Investment Corporation (CIC) for €12.25 billion – one of the largest ever property deals. The New York-based giant had flited between a full sale and a public listing for more a year before deciding to go with CIC’s massive bid.
While in October 2016, P3 Logistic Parks was sold by TPG and Ivanhoé Cambridge to Singaporean sovereign wealth fund Government Investment Corporation in a deal which valued the platform at €2.4 billion, one of the largest real estate transactions in Europe last year. The deal happened a month after P3 refinanced its portfolio, sourcing €1.4 billion of fresh capital.
IDI Gazeley has a European and North American footprint with 250 million square feet of assets housing more than 900 tenants. Its European portfolio is mainly focused in the UK, Germany and France and comprises around 135 million square feet of logistics assets.
The firm was formed in May 2014 after Brookfield merged two logistics companies, UK-based EZW Gazeley and US-based Industrial Development International. In June 2013, Brookfield bought a 95 percent share in EZW Gazeley for $370 million from state-owned investment firm Dubai World. Two months later, it acquired a 100 percent share in IDI for $595 million from the US subsidiary of Japanese construction firm Kajima Corporation.
Both businesses were acquired on behalf of Brookfield’s first global real estate opportunity fund, the $4.4 billion Brookfield Strategic Real Estate Partners.
Brookfield and IDI Gazeley have declined to comment.