Fund to buy 50 percent of industrial real estate portfolio
The Norwegian Government Pension Fund Global will through a joint venture with Prologis buy 50 percent of a portfolio of logistic properties for 1.2 billion euros, or about 8.9 billion kroner.
The seller is Prologis, which will retain the remaining 50 percent of the portfolio and manage the properties on behalf of the partnership. The purchase price includes existing bank debt of 0.1 billion euros.
The portfolio consists of 195 properties in 11 European countries including France, the UK, Spain, Poland and Italy. The properties comprise 4.5 million square metres of lettable space and are used mainly as distribution facilities by about 300 tenants from a range of industries. The transaction, agreed on by the parties today, is expected to be completed in the first quarter of 2013.
"The agreement marks the fund's first investment in industrial real estate and is in line with our strategy to build a high-quality portfolio that's spread over different countries and sectors," says Karsten Kallevig, chief investment officer for real estate at Norges Bank Investment Management (NBIM), manager of the fund. "We are very pleased to be teaming up with a partner of Prologis' calibre and look forward to a long and beneficial partnership."
The joint venture has an initial term of 15 years that may be extended. The venture intends to repay the existing bank debt by the first quarter of 2014. As part of the transaction, the fund will receive warrants to buy 6 million Prologis common shares for 35.64 dollars apiece.
The portfolio's largest exposure is to France, followed by the UK, Spain, Poland and Italy. These countries represent 73 percent of the total investment value. Properties are also located in the Czech Republic, Hungary, the Netherlands, Germany, Sweden and Belgium.
Norges Bank Investment Management (NBIM) safeguards and builds financial wealth for future generations as the manager of the Norwegian Government Pension Fund Global. The fund is invested globally in equity, fixed-income and real estate markets. It held assets worth 3,723 billion kroner at the end of September 2012.
Prologis, Inc., is a leading owner, operator and developer of industrial real estate, focused on global and regional markets across the Americas, Europe and Asia. As of September 30, 2012, Prologis owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 565 million square feet (52.5 million square meters) in 21 countries. The company leases modern distribution facilities to more than 4,500 customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises.
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