Prologis Closes JV Deal with NBIM

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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).
 

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