Norges Bank Investment Management announced this week that, in a joint venture with Prologis, it had signed an agreement to acquire a 45% interest in a 60 million square feet industrial portfolio with additional development potential. Prologis will acquire the remaining 55% interest in the portfolio and will perform the asset management on behalf of the partnership. The deal is part of an existing joint venture between Prologis and Norges Bank Investment Management, manager of the NOK6.94trn (€824bn) Government Pension Fund Global, to invest in US logistics property, according to an IPE report. Prologis, with a market value of about $22 billion, said the acquisition will expand its position in Southern California, New Jersey, Chicago, South Florida, Seattle and Dallas.
"It is rare to have the opportunity to acquire a portfolio of such high asset quality, customer profile and market composition that is so consistent with our own," said Hamid Moghadam, chairman and CEO, Prologis. "I have known KTR's leadership for 15 years and have always considered them to be astute investors and one of our toughest competitors in the U.S. This transaction will deliver accretive returns to our shareholders and will enhance our important and successful partnership with NBIM, which will now exceed $11 billion on two continents."
The 60 million square foot operating portfolio consists of 322 operating properties located across 17 US states. The acquisition includes an additional 10 properties with 3.6 million square feet currently under construction and land with a build-out potential of 6.8 million square feet. The purchase price includes the assumption of $700 million in debt. As part of the transaction, Prologis said it will issue up to $230 million of its common limited partnership units to KTR. Prologis said it has obtained a commitment from Morgan Stanley Senior Funding, Inc. to provide a $1.0 billion bridge facility for the transaction.
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