TPG, Ivanhoé Cambridge takeover Europe’s P3

The duo, which also teamed up to take over troubled Dutch company Uni-Invest in 2012 have struck again in Europe, this time buying PointPark Properties (P3) from Arcapita, the Bahrain bank

TPG Capital, the US private equity firm, and Canada’s Ivanhoé Cambridge have teamed up again for a major European real estate transaction.

The duo, which took over Dutch property company Uni-Invest in 2012 with Patron Capital, and bought London office Woolgate Exchange for £265 million (€310 million; $417 million) earlier this year, announced today it had acquired PointPark Properties (P3), a European investor, developer and asset manager of warehouse properties.

No value was placed on the transaction, though as part of the deal the partners said they would commit additional capital to strengthen P3’s balance sheet and to “provide support for future growth”.

The takeover of P3, which has a portfolio of 48 warehouses in the Czech Republic, France, Germany, Italy, the Netherlands, Poland, Slovakia, and Spain, plus a significant land bank, is the culmination of a topsy-turvy 18 months for the company.

It comes just less than a year after it decided to pull out of an IPO on the London Stock Exchange amid turbulent economic conditions in Europe at the time.

Following the decision to postpone its IPO last November, P3 said it was reconsidering its options and downplayed any suggestion that the company was now to be considered a forced seller of assets.

Commenting on the deal, Anand Tejani, London-based partner at TPG who leads the firm’s real estate activities in Europe, said: “P3 is a leading, full-service logistics platform with a high-quality portfolio of warehouse assets located in Europe's core distribution hubs.” He added it was “well-positioned” to benefit from the positive macro trends driving the current growth in occupational demand for European logistics space.”

Meka Brunel, executive vice president, Europe, at Ivanhoé Cambridge explained the strategic investment represented a “unique opportunity” to acquire a large and independent logistics platform in Europe.

She added: “The strong growth trend in e-commerce can only benefit the logistics industry in the long term and offers an opportunity to generate excellent returns from changing consumer lifestyles in Europe.”

Meanwhile, Ian Worboys, chief executive of P3 said that after 5 years working with Arcapita, which assembled the portfolio, he looked forward to TPG and Ivanhoé Cambridge becoming long term investors in P3.

“The new investment will allow us to accelerate the expansion of our activities in our existing and new markets,” he said.

In documents submitted to the US Bankruptcy Court early in 2012, it is stated that its owner Arcapita decided back in 2010 that an IPO was the best way to maximise the value of its portfolio, which at the time was 46 warehouses in seven European countries, as well as six undeveloped parcels of land and a group of real estate management companies with 69 employees. That route was deemed better than trying to sell parcels piecemeal in the private market.

The court documents stated that the assets were encumbered by substantial debt with looming maturities. “The debtors and their advisors have carefully considered a variety of options for addressing these upcoming repayment obligations, including the refinancing the debt and selling EuroLog assets via private sales…By combining the EuroLog assets, which are currently held by several separate funds, into a single investment opportunity, the debtor can capitalise on the increased value of a portfolio that is both larger and more diversified – and therefore more attractive to prospective investors,” said the court documents.

For its part, TPG decided get into real estate with a dedicated team in 2009 when it took part in the auction of a $4.5 billion non-performing loan and real estate owned portfolio of the failed Corus Bank from the Federal Deposit Insurance Corporation (FDIC).

Click here for a profile of the firm and an interview with de facto head of real estate, Kelvin Davis.