TPG Real Estate has completed the acquisition of Arlington Properties, a portfolio of 57 office buildings and one of the largest consented commercial landbanks in the UK.
Logistics specialist Goodman Group and UK financial services group Legal & General (L&G) were the vendors of what was known as the Arlington Business Parks Partnership (ABPP).
While the financial details of the transaction were not disclosed, market sources had estimated the asking price for the portfolio at around £450 mln (€489 mln).
Arlington includes a portfolio of office properties, located predominantly in Greater London and the South East, a number of pre-committed developments under construction, and one of the largest consented commercial landbanks in the UK.
The portfolio consists of 101 hectares of consented land and 57 buildings, totalling 130,000 m2. There are 80 tenants, including the headquarters of corporates such as Bristol-Myers Squibb, Amgen, Centrica, Mondelez, Harley Davidson, and Emirates Airlines.
ADIA was also a stakeholder in ABPP
Goodman and L&G formed the ABPP in 2003 to develop and own business parks with good access to large metropolitan areas in the UK. Abu Dhabi Investment Authority was also a minority shareholder. The partners mandated Cushman & Wakefield and Strutt & Parker to find a buyer for the portfolio last November.
TPG Real Estate, the property arm of US private equity group TPG, said that the business will now be restructured and managed as a new standalone property company. A team of Goodman employees have transferred to the new company to manage the portfolio. James Raven, former development director at Goodman's UK office business, has been named as managing director.
TPG Real Estate intends to make selective acquisitions to build out the business and capitalise on development opportunities within the landbank, while taking advantage of asset management opportunities within the existing portfolio.
Krysto Nikolic, partner at TPG Real Estate, described Arlington Properties as 'one of the highest-quality real estate portfolios in the country' and a 'compelling value-add investment opportunity'. TPG's goal is to enable Arlington to flourish as a leading UK property platform.
Refocus on logistics
For Goodman, the sale is part of its strategic plan to align its UK business more closely with its global core business of developing, owning and managing logistics properties. 'Goodman remains fully committed to the UK with our focus on the Goodman UK Partnership,' said Greg Goodman, CEO of Goodman Group.
The Partnership was established in 2015 with commitments of £600 mln for development and long-term ownership of UK logistics assets. 'We will continue to develop the existing landbank to extract the highest and best use, while taking advantage of opportunistic acquisitions as they arise. We are strategically targeting long-term opportunities in the M1/M6 corridor and close to London’s M25 motorway where we have developments completed and in progress for Clipper and Amazon at Northampton and Coventry,' Goodman said.
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Image: ABPP asset, Hammersmith Embankment
