As part of its effort to boost its international business,
) is setting up a real estate investment trust in Japan through
Nippon Prologis REIT Inc. (NPR). The company would be sponsoring
NPR exclusively and would keep a minimum of 15% ownership stake
WINTHROP REALTY (FUR): Free Stock Analysis
PROLOGIS INC (PLD): Free Stock Analysis
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In addition, Prologis, which is a leading owner, operator and
developer of industrial real estate in the U.S., would provide 12
of its Class-A properties in Japan to NPR for creating its
initial portfolio. Valued at around JPY 173 billion ($2 billion),
the assets span 9.6 million square feet. With an average age of
3.4 years, these assets are strategically located in global
markets of Tokyo and Osaka.
NPR would function as a long-term investment medium for logistics
facilities. Tokyo Stock Exchange has already given a nod to NPR
for its listing. Moreover, according to a Reuters report, in its
initial public offering, NPR plans to sell shares worth JPY 91
billion ($1.04 billion).
NPR enjoys sole negotiation privileges for eight additional
properties that are owned by Prologis. Further, it would get
pipeline, operational and personnel aid as par a sponsor support
agreement. Also, Prologis' wholly owned subsidiaries would offer
property and asset management supports to NPR.
As a matter of fact, the industrial property market in Japan is
showing signs of stability that was held back by the devastation
and loss caused by the earthquake and tsunami. The deal signifies
Prologis' motive to capitalize on the opportunity and meet the
improving property values and growing institutional demand for
Prologis also signed four new lease agreements spanning about 1.1
million square feet in Japan in November. The deals were penned
with existing clients for an undisclosed amount. Also, in
December, it inked a definitive deal with Norges Bank Investment
Management (NBIM) to create a Euro-denominated JV: Prologis
European Logistics Partners Sàrl. We believe such strategic
efforts would provide prospect for top-line expansion and hence
we remain encouraged.
Prologis is expected to release its fourth-quarter 2012 results
on February 6, 2013. The Zacks Consensus Estimate for the
company's fourth quarter FFO is currently pegged at 41 cents per
share. It currently has a Zacks Rank #2 (Buy). One of its peers,
Winthrop Realty Trust
), has a Zacks Rank #5 (Strong Sell).