US-based global private equity giant TPG is acquiring CEE real estate developer Trigranit and a large part of its €7 bn portfolio of standing assets and projects.
US-based global private equity giant TPG is acquiring CEE real estate developer Trigranit and a large part of its €7 bn portfolio of standing assets and projects.
TPG Real Estate intends to commit additional capital to fund future growth and to strengthen TriGranit’s balance sheet 'to create a leading real estate investment, development and management platform in central Europe'.
Trigranit has €3 bn of assets under management and a development pipeline valued at €4 bn. The transaction, which is estimated to be in the region of €500 mln, covers the Trigranit development and asset management platform as well as the developer's holdings in Poland and Slovakia, plus some development projects in Trigranit's native Hungary and Croatia.
'Trigranit is an excellent business with a strong track record. Its highly experienced management team with deep local market knowledge and a high-quality real estate portfolio position the company well for future growth,' Anand Tejani, a member of TPG Real Estate's investment committee, said in a statement on Monday.
'With the favourable macro and real estate trends in the region, coupled with TPG Real Estate’s expertise and financial resources, we see a number of opportunities to expand the Trigranit platform. We look forward to working together with the Trigranit management team to continue to grow the business,' Tejani added.
The transaction is expected to close before the end of the 2015. TPG was advised in the transaction by law firm Dentons.
Gránit Management
Trigranit's flagship WestEnd retail and office centre in Budapest and some other projects are being retained by Hungarian businessman and Trigranit's majority owner Sándor Demján.
WestEnd Centre - 50,000 m2 retail; 17,000 m2 office and a hotel - is 'unique in the world' as it is being developed on a brownfield site, Demján said. The company managing these projects will continue to operate under a new name, Gránit Management.
Besides Demján, Trigranit is currently owned by Sándor Csányi, Peter Munk and Vienna-listed Immofinanz. On completion of the transaction, Demján and Csányi will acquire the shares currently held by Munk and Immofinanz.
Comment
Explaining the decision to sell the majority of Trigranit to TPG, Demjan said: 'We founded TriGranit twenty years ago and it has grown into the region’s leading real estate company. I believe TPG Real Estate is a perfect buyer, as its extensive experience can carry on the Trigranit legacy. It is a great honor that one of the world’s largest investors has selected our company and its management in Europe.'
'TPG Real Estate’s expertise and global presence makes it the ideal partner to further strengthen and expand our business through the development and management of office and retail projects in key strategic locations, as well as through strategic acquisitions in the future,' said Árpád Török, CEO of Trigranit. 'I look forward to working with TPG Real Estate to achieve Trigranit’s next successful chapter of growth.'
Global heavyweight
TPG Real Estate is the real estate platform of TPG, a leading global private investment firm with some $75 bn of assets under management and 17 offices around the world. TPGRE includes both TPG Real Estate Partners, its equity investment platform, and TPG Real Estate Finance Trust, its debt origination and acquisition platform. Collectively, the two platforms have in excess of $6 bn of assets under management across TPGRE and other TPG-sponsored vehicles.
TPG Real Estate Partners has invested approximately $3 bn of equity in North America and Europe since 2009 and focuses primarily on investments in 'property-rich platforms and companies'.