Texas-based TPG, one of the world’s largest alternative asset management firms, has acquired a 75% interest in a pair of Toronto-area industrial parks through a deal that values the portfolio at 1.3 billion Canadian dollars, or 970.5 million U.S. dollars.

The deal is TPG's first joint venture with Oxford Properties Group, which plans to keep a 25% interest in the assets and will continue to manage the 11-building, 5.1-million-square-foot portfolio, according to a statement.

Oxford Properties is monetizing a three-quarters stake in the Brampton Business Park, a five-warehouse, 2.9 million-square-foot property that is located about 35 minutes northwest of downtown Toronto, as well as the Vaughan Business Park, another five-warehouse facility that measures 2.2 million square feet about 20 minutes to the east of the Brampton property. Current tenants of the industrial facilities include Mondelez, Best Buy, Campbells, Olympia Tile and others.

The deal is one of the largest private transactions of industrial property in the history of Canada, according to TPG's statement. The joint venture, which is the first between TPG and Oxford. TPG Real Estate, TPG's diversified real estate investment platform, is acquiring the properties through its dedicated real estate equity fund series. Oxford Properties is the real estate arm of Canada’s Ontario Municipal Employees Retirement System pension fund, which has CA$127.4 billion in net assets.

“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,” said Jacob Muller, partner at TPG, in a statement.

The move by TPG follows other major investors that have bought into the Canadian industrial real estate market. Blackstone made its first big deal in Canada in 2018, in a CA$3.8 billion acquisition involving Pure Industrial Real Estate Trust.

The New York-based alternative investment management company partnered with Ivanhoé Cambridge, which continues to have a minority stake in Pure. Pure Industrial remains the vehicle for Blackstone's industrial presence in Canada. The company has about CA$27 billion of capital in the country.

Previously known as Texas Pacific Group and TPG Capital, the American private equity firm is based in Fort Worth, Texas, and has invested about US$1.6 billion in industrial real estate over the past decade, mostly in the U.S. and Europe.

Oxford plans to use funds from the deal to build 3 million square feet of industrial space it aims to complete in the Greater Toronto Area by 2026, according to the statement.

The Greater Toronto area contains some of the most highly valued industrial property in the country, as Canada’s largest city sits in the heart of Southern Ontario, which is home to almost 40% of the entire 39 million Canadian population. The Greater Toronto Area sits only behind Chicago, Dallas and Los Angeles for its supply of industrial inventory in North America, but Toronto has been running short of land for future builds.

RBC Capital Markets and Desjardins Capital Markets served as financial advisers to the joint venture and CBRE acted as an additional financial adviser to Oxford. Stikeman Elliott LLP acted as lead legal counsel to Oxford. Davies Ward Phillips & Vineberg and Kirkland & Ellis served as legal counsel to TPG.