Sixth Street Deepens UK Bet With $472M Industrial Play

U.S. private equity heavyweight Sixth Street is doubling down on British real estate, sealing a roughly $472 million industrial deal that extends its recent push across the United Kingdom.

The San Francisco-based investor recapitalized a 37-property, 1.7 million-square-foot industrial portfolio owned by Clipstone Industrial REIT, according to Bisnow. The portfolio, roughly 40 percent of which sits in London and the M25 corridor, spans a series of southeast markets, including Enfield, Hanworth, Sutton, Bracknell and near Stansted Airport.

As part of the deal, Sixth Street and Clipstone launched a joint venture dubbed C6 that will target additional industrial assets. Sixth Street will supply most of the equity, while Clipstone remains the operating manager.

The partnership underscores the appeal of industrial space, one of the U.K. property sectors still posting healthy rental growth despite high borrowing costs and softening valuations elsewhere.

The move adds another notch to Sixth Street’s U.K. footprint. The firm teamed up with Patron Capital last year to buy homebuilder Cala from Legal & General for $1.78 billion, and in March it partnered with logistics specialist Copley Point on three warehouse purchases.

It also joined Blackstone in a bid for Warehouse REIT, a listed $635 million logistics landlord, though Blackstone ultimately went solo on the acquisition.

Sixth Street is better known for its private equity and sports investments. It recently joined an ownership group buying the NBA’s Boston Celtics and in the spring, paid an undisclosed price for a slice of the San Francisco Giants and its 2.7 million-square-foot Mission Rock mixed-use development.

But it has been building a meaningful real estate platform, particularly around resilient asset classes.

Last year, Plymouth Industrial REIT reeled in over $250 million in a partnership with Sixth Street Partners on a portfolio of industrial properties concentrated in Chicagoland.

An affiliate of investment giant Sixth Street Partners also bought the landmark Fairmont Dallas in April for $111 million.

— Holden Walter-Warner