Ivanhoe, Brookfield said to be in talks for $4B deal for developer

Toronto-based Brookfield Asset Management Inc. is in talks to sell industrial property developer IDI Logistics to Ivanhoe Cambridge Inc., a Montreal-based real estate investor, according to people familiar with the matter.

The companies are nearing a deal that could value Atlantabased IDI Logistics at more than $4 billion, said the people, who asked to not be identified because the matter isn’t public. The deal hasn’t been finalized and talks could fall through.

Representatives for Brookfield, IDI and Ivanhoe declined to comment.

There have been several large industrial real estate deals this year, as institutional investors pile into the sector. They’re drawn to its growth prospects, which correlate with ecommerce. Blackstone Group LP closed its US$7.6 billion purchase in October of Gramercy Property Trust; Prologis Inc. bought DCT Industrial Inc. in August.

“Time to market has become increasingly important in the e-commerce world,” Jonathan Woloshin, head of Americas equities research with UBS AG, said in a note to clients in September. “This is leading to a shrinking of the supply chain and the increased need for warehouse and distribution facilities in higher population densities.”

IDI Logistics is owned by Brookfield’s real estate arm, Brookfield Property Partners LP, which agreed to buy IDI’s predecessor for US$1.1 billion in 2013. It owns or has interests in warehouses, distribution facilities and other industrial properties throughout North America.

Ivanhoe Cambridge is the real estate arm of Caisse de dépôt et placement du Québec, Canada’s second largest pension fund.