TPG, Oxford finalize record real estate deal in Toronto
It represents one of the largest private industrial real estate transactions in Canada to date.
TPG, a global alternative asset management firm, and global real estate developer Oxford Properties Group, have announced a $1.3 billion deal.
TPG has acquired a 75% interest in Oxford’s two Class-A industrial business parks in the Greater Toronto Area: Brampton Business Park and Vaughan Business Park. Oxford has retained a 25% interest in the assets and will continue to manage the 5.1 million square-foot portfolio. The transaction values the portfolio at $1.3 billion.
The joint venture, which is the first between TPG and Oxford, represents one of the largest private industrial real estate transactions in Canada to date. TPG Real Estate, TPG’s diversified real estate investment platform, is acquiring the properties through its dedicated real estate equity fund series.
“We see the GTA as one of the most attractive industrial markets globally, with strong real estate fundamentals and population and employment growth outpacing many major U.S. markets,” said Jacob Muller, partner at TPG. “We have followed the Canadian industrial sector for several years, and believe this joint venture provides a unique opportunity to enter the market at scale through the acquisition of some of the highest quality industrial assets in all of Toronto.
The properties are located in market-leading distribution nodes in the GTA, accessible by several highways and close to intermodal yards, labor, and airports. Each business park includes five buildings, spanning approximately 2.9 million square feet in Brampton and approximately 2.2 million square feet in Vaughan.
“With this transaction, we generate significant capital to reinvest back into Ontario, which includes 3 million square feet of new GTA industrial developments we are set to deliver by 2026,” said Jeff Miller, head of North American Industrial at Oxford Properties. “We look forward to working together with TPG to create long-term value in the portfolio on behalf of our respective stakeholders.”
Milos Dajic, Vice President of Investments at Oxford Properties explained that the GTA remains one of the best performing industrial markets in North America, and, as of Q3 2023, enjoys a sub 2% availability rate.
“It remains a high barrier to entry market, with new construction representing less than 2% of the existing stock,” he said. “This bolsters our long-term conviction in this market, which has helped to attract a like-minded investor such as TPG.”
