Singapore’s GIC Pte agreed to buy IndCor Properties Inc. from BlackstoneGroup LP for $8.1 billion, expanding in the U.S. market for industrial real estate.
The purchase is expected to close in the first quarter, Blackstone said in a statement today. The agreement ends the prospect of an initial public offering for IndCor, which had been planning a share sale valuing the company at about $8 billion, people with knowledge of the matter said in August.
GIC, Singapore’s sovereign-wealth fund, is gaining warehouses across the U.S. as demand for industrial space climbs from Web retailers and other customers. Chicago-based IndCor owns about 117 million square feet (10.9 million square meters) of buildings in 29 markets. For Blackstone, the deal allows it to exit a major investment at a profit as it invests a new series of property funds.
“We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the United States,” Tim Beaudin, chief executive officer of IndCor, said in the statement. “We are excited about the company’s future prospects under new long-term ownership with GIC.”
Blackstone started building IndCor in 2010, when the plunge in property values after the financial crisis created opportunities to acquire assets from distressed sellers. Industrial real estate prices in major markets have rebounded from the crash and are within 5 percent of their pre-crisis peak, Moody’s Investors Service said in a report last month.
GIC, which has been acquiring real estate worldwide, has branched out from prime office towers in major cities. In September, a GIC affiliate and two Canadian pension funds invested $700 million in XPO Logistics Inc., a provider of services including airfreight forwarding and warehousing management that’s based in Greenwich, Connecticut.
Competition for U.S. industrial properties is intensifying as the economy rebounds, trade increases and U.S. retailers seek multiple distribution channels to speed up delivery of goods bought online, said Chuck Davis, the Southeast regional head for MetLife Inc.’s real estate division, which oversees about $60 billion of property assets.
“Now that the U.S. economy is coming back, we’re seeing a lot of international investors,” Davis said. Industrial rents are rising as space that was vacated during the recession gets leased up rapidly, he said.
Industrial properties can be built faster and cheaper than most other commercial property types, Davis said. That means new supply eventually could slow rent growth, he said.
Blackstone, based in New York, was advised by Eastdil Secured LLC, Citigroup Inc., Barclays Plc and Royal Bank of Canada’s RBC Capital Markets, according to the statement.
--With assistance from Klaus Wille in Singapore.