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TOKYO-Continuing to increase its Asian presence through a variety of strategies, ProLogis has negotiated a $735-million sale-leaseback transaction with the Matsushita Group, a leading global supplier of electronics and other consumer products. The deal gives ProLogis and joint venture partner GIC Real Estate Pte Ltd. a block of 17 warehouse properties ranging in size from 84,000 sf to 831,000 sf for a total assemblage of 3.6 million sf.
“This is an important transaction for ProLogis,” says Masato Miki, the Denver-based REIT's co-president of Japan operations. “Matsushita has a global reputation for quality and value across a broad spectrum of consumer product categories, and we…look forward to becoming their primary facilities provider in Japan.” Matsushita will continue to occupy 15 of the warehouses, which are mostly situated in Tokyo and Osaka, Japan's leading distribution markets. About 60% of the square footage in the portfolio is in those two cities.
Matsushita has an ongoing international relationship with ProLogis, currently leasing nearly 850,000 sf in two facilities, one in Tokyo and the other in Juarez, Mexico. Of the 17 Japanese warehouses just acquired, the two not occupied by Matsushita include a property in Morioka leased to an independent logistics company. The other is a small, vacant facility in Osaka that ProLogis plans to reposition, Miki relays.
The sale-leaseback is the second major deal of its type completed in Japan by ProLogis during the past 12 months, building upon the firm's agreement to buy eight distribution centers from cosmetics manufacturer Shiseido. That pact, which closed last December through the ProLogis Japan Properties Fund II, was valued at $136 million. The latest sale-leaseback gives ProLogis in excess of 25 million sf of commercial real estate in Japan, primarily industrial space concentrated in Fukuoka, Hiroshima, Nagoya, Osaka, Sendai and Tokyo. ProLogis had another 4.9 million sf of new supply under construction in the country as of mid-year. Major Japanese tenants of ProLogis include Askul, Hitachi Transport, Nippon Express, Shinkai Group and Yamato Logistics.
In announcing the Matsushita sale-leaseback, officials did not disclose the breakdown of the partnership interest between ProLogis and GIC Real Estate. The latter entity is the real estate investment arm of the Government of Singapore. GIC officials did not comment on any aspects of the transaction, but Miki says his firm is eager to enter into more sale-leaseback deals with companies seeking to outsource distribution and real estate operations. “Given our access to capital, the depth of our customer relationships, and the leading position we occupy in the market, we are well-positioned to become the choice for corporations adopting this strategy,” says Miki.
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