ProLogis has signed a joint venture deal with Japan Logistics Fund that would allow the J-REIT to buy a 50 percent stake in future industrial developments in Japan.
The Denver-based fund manager said in a statement today the deal was part of the firm’s delivering efforts. Last year, ProLogis sold its China operations to GIC Real Estate for almost $1.3 billion in a bid to pay down its debt load.
The deal will give Mitsui & Co, which owns a controlling stake in Japan Logistics Fund, the right to conduct due diligence on properties developed by ProLogis in Japan before information is provided to a third party, the J-REIT said in a separate statement.
Mitsui would then have the priority negotiation rights on properties. All properties acquired would be own on a joint basis by JLF and ProLogis, but the J-REIT said it would not buy all of ProLogis’ development properties, just those that fit an “agreed … criteria”.
JLF added the joint venture would boost its portfolio from primarily single-tenant facilities to a mix of single and multi-tenant facilities. It will allow JLF to “diversify [its] customer base and therefore stabilise [its] cash flow”, the firm added.
ProLogis has been seeking partners to help it develop properties for its vast land bank. The firm the JV would allow it to “continue managing and leasing the properties, earning management fees related to those services”, as well as being a joint owner.
ProLogis has developed 39 distribution facilities in Japan comprising 2.6 million-square-metres of space to date, with another 11 (equivalent to 1 million-square-metres of space) under construction.