P3 Acquires Major Logistics Portfolio in the Czech Republic for $690M
- Aug 28, 2014
Prague, Czech Republic—In one of Europe’s largest real estate deals of the past decade, PointPark Properties (P3) has agreed to purchase approximately 6.75 million square feet (627,000 square meters) of logistics warehouses and associated development land in the Czech Republic.
Two funds advised by Tristan Capital Partners and VGP are selling the properties for about $690 million (€523 million).
Subject to the finalization of contractual terms and regulatory approvals, the transaction is expected to close during the fourth quarter of 2014.
CBRE advised P3 on the transaction, which is the largest industrial property deal ever in the Czech Republic and the second largest property deal of the country’s any sector. It is of a similar volume to the sale of the Palladium, Prague’s landmark shopping center, which was transacted for about $698 million (€530 million) in 2007.
The portfolio consists of 11 logistics parks totaling 58 warehouses, as well as land available for the construction of up to 1.345 million square feet (125,000 square meters) of additional space.
It includes Prague’s Horní Počernice logistics park, the largest park in the Czech Republic, which accounts for about half of the amount of space that P3 has agreed to purchase. VGP Group began building the project in 2006.
The property is now in high demand from diverse occupiers, especially e-commerce retailers, since it provides easy access to Prague’s central area and offers excellent connections to the rest of the Czech Republic, Germany and Poland, via the capital city’s network of ring roads. It also includes development land with the potential of adding up to 742,000 square feet (69,000 square meters) of Build to Suit space.
Other logistics properties included in the sale are located in Plzen, Liberec, Hradec Kralove and Olomouc. These logistics parks also benefit from good transportation connections to Germany, Poland and Slovakia, and include a diverse range of tenants, most of which cater to the European automotive industry.
“This investment continues our expansion strategy as it strengthens the company´s position in the top rank of European logistics warehouse owners. The Czech Republic is a strategic market for us because it sits at the crossroads of the main transport routes between Western, Central and Eastern Europe. The assets we acquired in this transaction are situated in prime logistics locations and are amongst the most modern facilities in Europe. Combining the acquired facilities with our existing holdings means P3 now owns one of the largest networks of logistics parks across Europe and we can offer our extensive customer base even more real estate options,” says Ian Worboys, P3 CEO.
“Having the ability and resource to underwrite a transaction of this scale and complexity gave us the opportunity to add significant value at both the bidding stage, and final underwriting of the transaction. We are delighted to participate with P3/TPG in such landmark and strategically important acquisition,” adds Jeff Alson, head of capital markets for CBRE.
P3 has retained VGP to continue providing property and facility management services to the disposed portfolio.
VGP plans to primarily reinvest its part of the sales proceeds in core markets located in the mid-European region and especially Germany.
“This deal underlines the quality of what we have realized in the past and allows us to accelerate considerably our ambitious growth plans in the future. As we have been recording an increasing demand for high-end and modern industrial properties in Germany and Eastern Europe, now is an optimal time to sell and to re-invest the sales proceeds in new greenfield development projects,” Jan Van Geet, CEO of VGP, says.
Prague-based P3, a specialist owner, developer and manager of European logistics properties, is owned by shareholders TPG Real Estate and Ivanhoé Cambridge. P3’s asset base will now comprise 117 warehouses spread across 8 countries and a land bank with zoning for more than 8.4 million square feet (780,000 square meters) of potential development.