New York private equity firm Blackstone Group LP (BX) has agreed to sell its industrial property business IndCor Properties Inc. to Singapore sovereign wealth fund GIC Private Ltd. in a deal valuing the Chicago-based company at $8.1 billion.
The deal announced early on Tuesday, Dec. 2, puts an end to Blackstone's alternative exit plan of an initial public offering for IndCor. Instead it places the company in the hands of a fund which IndCor described as a long-term investor.
"We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the United States," IndCor CEO Tim Beaudin said in a statement, talking of his excitement at the company's "future prospects under new long-term ownership with GIC."
A sale to GIC also gives IndCor the security of knowing its new owner has taken the strategic decision to step up its global real estate purchases in recent months.
In January, it teamed up with the Abu Dhabi Investment Authority to acquire New York's 1.1 million square foot Time Warner Center for $1.3 billion.
According to the Singapore Straits Times, GIC also bought office buildings in Tokyo and invested in Australian student accommodation as a way "to diversify its portfolio and secure better yields."
Elsewhere in Asia, GIC last month announced a joint venture with Indonesia's Rajawali Group to jointly invest up to $500 million in equity in property projects in Indonesia, with a focus on Jakarta's Central Business District. It also took a 49% stake in a joint venture with the Scentre Group to acquire five Westfield shopping malls in New Zealand with a combined value of about $1.2 billion. Its existing partnership with Scentre includes two Westfield malls in Australia.
In the year to April 1, real estate still accounted for only 7% of its portfolio and GIC is not averse to divesting properties where it sees the opportunity. In October the fund sold the City of London's Bank of America Merrill Lynch Financial Centre to Norges Bank Investment Management for £582.5 ($914.4 million), seven years after buying the building from Merrill Lynch.
IndCor is a portfolio company of Blackstone's Real Estate Partners funds VI and VII, Blackstone said. It owns and operates a portfolio of 117 million square feet of "high quality industrial properties in key markets" in the U.S. Its assets are principally located in in-fill industrial markets close to domestic and international transportation hubs, logistics and warehouse and distribution networks and large population centers.
The deal is expected to close in the first quarter of 2015, Blackstone added.
Wells Fargo & Co.'s Eastdil Secured advised Blackstone, as did Citigroup Inc., Barclays plc and RBC Capital Markets.