Wednesday, August 7, 2013

Brookfield To Boost Industrial Property Holdings with $1.1 Billion IDI Buy

Brookfield Property Partners (NYSE:BPY) has reached an agreement to buy Atlanta-based Industrial Developments International Inc. (IDI) for $1.1 billion. 

IDI owns 75 industrial distribution facilities totalling 27 million square feet located in 12 states. The deal also includes IDI's third party property management business and development sites it controls that can support 49 million square feet of future warehouse distribution projects. 

Acquiring IDI will provide a significant boost to Brookfield's U.S. industrial property holdings and establish the firm as one of largest global owners of industrial property, capping a series of acquisitions by the recent property spin-off of Brookfield Asset Management. 

Earlier this summer, BPP bought EZW Gazeley Ltd., a warehouse and distribution park developer with locations in the U.K., Western Europe and China. That followed the acquisition last year of a majority position in Verde Realty, which owns 18 million square feet of industrial space in major U.S. distribution markets and markets along the U.S. and Mexico border. 

Following the IDI acquisition, Brookfield will have more than 62 million square feet of industrial property in its portfolio, plus 79 million square feet of future development potential, making it one of the largest owners of industrial and logistics facilities. 

Ric Clark, CEO of Brookfield Property Group, said the combined business will own "irreplaceable assets and development sites near major markets and transport routes" and said one of the firm's investment goals is to create a global industrial real estate company capable of delivering high quality distribution facilities to its clients around the world. 

Brookfield Property Partner is buying IDI from a U.S. subsidiary of Kajima Corp. It will own a quarter-share interest in IDI with the balance owned by Brookfield’s institutional partners. The transaction is expected to close in the fourth quarter of 2013. 

Brookfield also has a partnership arrangement with Dallas-based Hillwood Industrial Partners to acquire industrial properties in the U.S. 

The acquisition will be made through Brookfield’s $4.4 billion Brookfield Strategic Real Estate Partners fund, which targets opportunistic investments in commercial property markets, with an emphasis on North America, Europe, Brazil and Australia.

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