GIC CIO Lee Kok Sun seems cheerful about his new set of European sheds
GIC is known for its warehouse fixation, and the $100 billion Singaporean sovereign wealth fund has jumped back into logistics once again, acquiring P3 Logistic Parks for €2.4 billion ($2.6 billion) from TPG Real Estate and Ivanhoé Cambridge. The deal is the largest European real estate transaction in 2016 to date.
Singapore’s sovereign wealth fund will get 163 warehouses in 62 locations with 3.3 million square metres (355 million square feet) of space across nine countries in continental Europe. P3 also has 11 new sites under construction with 300,000 square metres in the pipeline and a land bank of 1.4 million square metres.
“We believe P3’s strong growth will continue given its diversified, income-producing portfolio and substantial land bank,” Lee Kok Sun, Chief Investment Officer at GIC Real Estate said. “We are confident of the long-term potential of the European logistics sector, and look forward to expanding this attractive platform.”
TPG Real Estate and Ivanhoé Cambridge purchased P3 in 2013 from then bankrupt Arcapita Bank BSC. At the time of the sale, P3 had 44 warehouses with 1.46 million square meters under its control.
Will European Warehouses Replace Asian Assets?
GIC’s acquisition of Czech-based P3 and their collection of warehouses comes one week after details emerged of CIC’s reported interest in acquiring Global Logistic Properties and its 52 million square metres of warehouses.
Singapore’s sovereign wealth fund holds a 37 percent stake in GLP and is the firm’s largest shareholder. A deal for the warehouse developer valued at $6 billion would rank among Asia’s largest corporate takeovers in history, but leave GIC short on sheds, an investment they have taken a liking to.
GIC Keeps the Flame Burning for Distribution
Earlier this year, a GIC-backed fund acquired a facility from Hyundai for $130M in Korea
Warehouses might not be all that exciting to some, but logistics is where the magic happens for GIC. In late October, the firm teamed up with Indonesian warehouse provider PT Mega Manunggal Property to invest S$1 billion ($720 million) during the next three years on distribution facilities in Southeast Asia’s biggest economy.
The fund also stepped up its exposure in South Korea’s logistics sector by investing in a fund managed by ADF Asset Management that purchased the Hyundai Logistics Distribution Center. GIC was also one of the earliest backers of logistics players Logos Property Group.
GIC made quite the shed splash in 2014 when it helped fund GLP’s purchase of US warehouse owner IndCor Properties Inc from Blackstone Group for $8.1 billion. The warehouse portfolio featured 117 million square feet (11 million square metres) of space located at facilities across the US.
Sovereign Wealth Funds Start Touring the Continent
With Brexit raising doubts about the UK market, GIC has made a significant investment in the continental Europe for a second straight month. The fund partnered with global student accommodation specialists GSA to invest in student housing in Germany.
China’s largest sovereign wealth fund has also been looking at the continent for deals. In September, CIC teamed up with private investment manager AEW to buy two French malls for €188 million ($206 million) from Grosvenor Europe. The deal saw the fund increase the number of retail complexes it owns in France to 10.
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