Prologis Closes JV Deal with NBIM - Analyst Blog
March 20 2013 - 8:14AM
Zacks
San Francisco-based industrial real estate investment trust
(REIT), Prologis Inc. (PLD), announced the
completion of Prologis European Logistics Partners Sàrl – a $3.1
billion joint venture (JV) with Norges Bank Investment Management
(NBIM). The JV will have an initial term of 15 years, which may be
extended for an additional 15-year period.
Prologis European Logistics Partners Sàrl is a 50 / 50 JV with an
€1.2 billion ($1.55 billion) investment by each Prologis and NBIM.
Notably, NBIM is a unit of Norges Bank – the Central Bank of
Norway. It is in charge of the operational management of the
Norwegian Government Pension Fund Global and manages foreign
exchange reserves of Norges Bank.
Upon closure, the JV acquired a portfolio of Prologis’ wholly-owned
Class-A logistics facilities in the European markets. The portfolio
consists of 195 properties spanning approximately 49 million square
feet. The JV is expected to strengthen its portfolio through
strategic acquisitions in target markets to complement the
company’s existing asset base.
The new JV is a strategic fit as it will enable both the companies
to substantially penetrate the industrial real estate market of
Europe. In addition, the JV deal signifies a major accomplishment
for Prologis, as it completes the company’s European
recapitalization ahead of schedule. Further, Prologis will have the
opportunity to reduce its venture ownership to 20% following the
deal’s second anniversary.
As a matter of fact, Prologis is significantly capitalizing on
promising opportunities across the globe. With improving property
values and rising institutional demand for quality properties, the
company has witnessed rising customer interest in new build-to-suit
development projects worldwide.
Additionally, leasing decisions that were earlier postponed due to
volatility in the markets are gradually coming off the shelf. This,
in turn, is expected to help augment the company’s top line, going
forward and provide upside potential to its stock price.
Prologis currently holds a Zacks Rank #3 (Hold). Other REITs that
are performing well and are worth a look include Ryman
Hospitality Properties Inc. (RHP), Omega
Healthcare Investors (OHI), both of which carry a Zacks
Rank #1 (Strong Buy) and Cousins Properties Inc.
(CUZ) that holds a Zacks Rank #2 (Buy).
COUSIN PROP INC (CUZ): Free Stock Analysis Report
OMEGA HLTHCARE (OHI): Free Stock Analysis Report
PROLOGIS INC (PLD): Free Stock Analysis Report
RYMAN HOSPITLTY (RHP): Free Stock Analysis Report
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