P3 CEO Worboys sees takeover as 'transformational'

The sale of P3 to investors TPG and Ivanhoé Cambridge will allow P3 to transform from a developer and asset manager into an active investor in the European logistics market, CEO Ian Worboys told PropertyEU in an interview.

‘Historically, we have been a developer and the asset manager of Arcapita’s assets. Now P3 will own the assets and be an active investor in income-producing warehousing assets across Europe to provide higher returns to our investors. We are already a European player and we will be looking to expand our business. TPG and Ivanhoé Cambridge will make this expansion possible,' Worboys said.

US private equity group TPG and Canadian group Ivanhoé Cambridge announced on Wednesday that they have acquired full ownership of PointPark Properties (P3) from Bahraini investment company Arcapita.

Worboys said the transaction also strengthens P3's balance sheet, providing reassurance to the sellers that the company has the capacity to complete acquisitions. 'The investment will allow P3 to accelerate the expansion of its activities in its existing and new markets,’ he added.

The deal represents Ivanhoe Cambridge's first acquisition in European logistics, confirming the sector’s increasing appeal to institutional investors.

Meka Brunel, executive vice president for Europe at Ivanhoé Cambridge, said: ‘This strategic investment represents a unique opportunity to acquire a large and independent logistics platform in Europe. With assets strategically positioned along major air, sea and rail transport routes, P3 offers a very attractive growth potential, and will contribute to the diversification of our real estate portfolio.’

The transaction is TPG's third acquisition in Europe in the past 18 months. The US private equity firm recently gained control of Woolgate Exchange in London's financial district and a mixed portfolio in the Netherlands through CMBS workouts. In Spain, it is believed to have acquired La Caixa's real estate arm.

Anand Tejani of TPG said P3 will benefit 'from the positive macro trends driving the current growth in occupational demand for European logistics space'.

Worboys noted that TPG and Ivanhoe have been looking to invest in a leading European logistics platform for some time. 'They felt that the P3 management team had full experience and depth of knowledge across the main European markets,’ he commented.

Although financial details were not disclosed, the deal is understood to have been ‘beneficial’ for Arcapita which is believed to have paid €230 mln for P3 in 2008.

‘They were able to agree a sale of P3 that was more advantageous than the IPO,’ Worboys said. Arcapita had long been looking to list P3 and raise the necessary equity to finance its acquisition pipeline but the plans were scrapped in 2012 after the company failed to get the price it was seeking for the logistics company.

PropertyEU reported in March this year that P3 was working behind the scenes to incorporate new investors. ‘We first had discussions with TPG and Ivanhoé Cambridge some 18 months ago, when they were looking to invest in a European logistics platform, shortly thereafter we were looking to float the company on the London stock exchange. Eventually this did not happen and we resumed discussions,’ Worboys said.

As part of the transaction, the buyers will commit additional capital to strengthen P3’s balance sheet and to provide support for future growth, the companies said in a joint statement.

Jones Lang LaSalle was the sole adviser to TPG on this deal.

P3 is a specialist investor, developer and asset manager of warehouse properties, active in 12 European countries with a portfolio consisting of 48 warehouses covering 1.46 million m2. Its land bank allows for the development of more than 590,000 m2 of warehouse space across Europe.

Logistics pruducts have grown increasingly popular among institutional investors in search of higher returns amid a low interest rate environment.

'Several companies have been looking at logistics for the attractive returns. I think that the one thing the recession has shown is that if you look at warehouse returns over the past years, they have outperformed offices and were close to those in the retail sector. Logistics was always seen as an unglamorous sector but has shown that it can perform very well,' Worboys said.

Recent deals pointing to the growing appeal of logistics include the creation of a joint venture between UK REIT Segro and Canada's pension fund PSP with the aim of establishing a €2 bn Continental European logistics platform.

Similarly, New York-listed real estate manager Brookfield Property Partners acquired UK-based logistics developer Gazeley and said it planned to expand aggressively across Europe. In March this year, Norway's giant oil pension fund completed the acquisition of a half-share in a €2.4 bn portfolio from New York-listed Prologis.