ProLogis, GIC invest in $136m Japanese logistics deal

A private equity real estate fund raised by the US logistics REIT and the government of Singapore’s real estate arm is acquiring eight distribution centers in Japan.

A joint venture between Denver-area industrial REIT ProLogis and GIC Real Estate, the government of Singapore’s real estate investment arm, has acquired eight distribution centers in Japan for $136 million (€103 million).

The private equity real estate fund, ProLogis Japan Properties II, is acquiring the buildings from cosmetics company Shiseido, which also sold its logistics operations to Hitachi Transport in a related transaction. ProLogis will lease the distribution centers back to Hitachi for use by Shiseido.

The eight centers are comprised of 1.7 million square feet of space and are located across Japan, with properties in Tokyo, Osaka and Hiroshima.

“For some time, manufacturers throughout the country have been disposing of real estate in an effort to strengthen their balance sheets,” Masato Miki, ProLogis’ co-president of operations in Japan, said in a statement. “More recently, companies have begun to embrace outsourcing of supply-china management as a way to improve focus on core business operations.”

Hitachi Transport leases more than 1.8 million square feet from ProLogis and is one of the REIT’s largest customers in Japan. Hitachi also leases 175,000 square feet from ProLogis in Tijuana, Mexico.

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

ProLogis has 15.6 million square feet of space in Japan and has an additional 5.7 million square feet under development. The firm also works with companies like Askul, Nippon Express, Panasonic, Renown, Sanyo Electric Logistics and Shinkai Group, in addition to Hitachi.