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Prologis Sells Warehouse Properties in U.S., Europe for $1.1 Billion

Updated: 86-Building Sale to Mapletree Largely Completes San Francisco-Based Logistics Giant's Plan to Sell Off 'Non-Strategic' Assets
October 3, 2018
Prologis is selling non-core warehouses. Image courtesy of Prologis Inc.



Prologis Inc., the world's largest owner and developer of warehouses, said it sold a $1.1 billion portfolio of domestic and international properties as it makes good on its plan to take advantage of strong market for industrial property by shedding what it describes as "non-strategic" assets.

The San Francisco-based real estate investment trust sold 86 properties in the United States and Europe totaling 16.5 million square feet plus 144 acres of land to Singapore-based property developer and asset manager Mapletree for $1.1 billion.

The deal includes 40 buildings totaling 6.6 million square feet in the Seattle, Dallas and Chicago areas and 46 buildings totaling 9.9 million square feet, mostly in Poland, France and Hungary.

Norges Bank Real Estate Management, which partnered with Prologis on large portfolio purchases from 2013 to 2015, disclosed that the partnership sold 37 of the properties totaling 8.4 million square feet, in Seattle, Chicago, Dallas, New Jersey, South Florida, France, Poland, Hungary and the Netherlands as part of the larger transaction with Mapletree.

The sale agreements were signed May 16 and the deal was completed Oct. 1, according to Norges, which said it received $182.6 million for its 45 percent interest in the U.S. portfolio and 90.2 million Euro (U.S. $104 million) for its 50 percent stake in the European portfolio.

Prologis co-owned the bulk of the assets, about $934 million, with investment partners such as Norges. The warehouse giant said its share of proceeds from the sale are about $610 million.

Industrial property sales have outperformed other major commercial sectors across the country in recent quarters, driven by the popularity of online retailer Amazon and the move by brick-and-mortar retailers to adopt e-commerce strategies as consumers do more of their shopping online.

About $63.6 billion in industrial property has sold in the first three quarters of 2018, up 10 percent from the same time in 2017, according to preliminary CoStar sales figures. Brokers say portfolios put on the market regularly draw more than a dozen qualified bidders, a testament to the income potential of logistics property. This type of real estate leads all other property types in average rental rate increases at roughly 6 percent over the past four quarters.

The buyer, Mapletree, said the acquisition advances its strategy since 2014 of venturing beyond Asia into the U.S. and Europe and increase its "global footprint as a logistics real estate provider," Michael Smith, Mapletree's regional chief executive for Europe and the U.S., said in a statement Wednesday.

The properties, located in major distribution hubs, position Mapletree to take advantage of growing investor demand for modern logistics facilities and the thriving global e-commerce sector, Smith said. Mapletree, an active capital manager, has also started a loan syndication of its U.S. and European logistics properties for institutional and high net-worth investors, he added.


Prologis Chief Investment Officer Michael Curless said in a statement that the sale "effectively completes our efforts to align our portfolio with our long-term investment strategy." Prologis began pruning its portfolio of less desirable assets in 2011 and will have sold a total of about $14 billion in property from that time through the end of this year, he added.

Curless noted in the company's July second-quarter earnings call that "dispositions have been revving up" in preparation for a busy second half for the company, with more than $1 billion in asset sales under way.

"Pricing is very strong both in the Europe and U.S.," Curless said at the time, calling the current market as "a good time to be the seller."

Prologis, which on Aug. 22 completed an $8.5 billion merger with Denver-based DCT Industrial Trust, owned or had investments in about 756 million square feet of property in 19 countries as of mid-year, including DCT's properties.

Editor's note: This update adds Norges Bank as the co-investor and seller with Prologis in a portion of the portfolio sold to Mapletree.

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