ProLogis buys $735m Japanese logistics portfolio

The industrial property developer has picked up seventeen warehouse properties in Japan, having recently decided to double its total investment in the country to nearly $8bn by the end of 2009.

Denver-based Prologis has purchased a 17-building warehouse portfolio in a sale-leaseback transaction with consumer electronics supplier Matsushita Group for $735 million (€519.5 million).

The properties were acquired by a joint venture between Prologis and GIC Real Estate, the real estate investment arm of the government of Singapore’s investment division.

“This is an important transaction for ProLogis in Japan, one that exemplifies a key long-term trend in the Japanese distribution market,” Masato Miki, co-president of Prologis’ Japan operations, said in a statement released by the firm. “Increasingly, large companies here are seeking to outsource distribution and real estate operations in order to fortify their balance sheets and to focus their business resources on core operations.”

The distribution centers, ranging in size from 84,000 square feet to 831,000 square feet, are located across Japan from Sapporo City on the northern island of Hokkaido to Fukuoka Prefecture in the south. More than 60 percent of the portfolio by floor area is located in the country’s two largest distribution markets: Tokyo and Osaka.

Matsushita Logistics will lease back 15 of the sites.

The transaction is the second sale-leaseback transaction for ProLogis in Japan in recent times. In December last year, Prologis announced it was acquiring eight distribution centers in Japan from cosmetics manufacturer Shiseido for $136 million through its ProLogis Japan Properties II.

ProLogis and GIC Real Estate are the only investors in the Japan-focused fund, which was launched in 2005 with more than $600 million in capital. The first ProLogis/GIC vehicle closed in June 2002.

ProLogis currently has 21.7 million square feet of industrial space in Japan, concentrated in the markets of Tokyo, Osaka, Nagoya, Fukuoka, Hiroshima and Sendai. An additional 4.9 million square feet of space is under development.