Prologis Inc. (NYSE: PLD), the world’s leading logistics real estate investment trust (REIT) is reported to be selling 22 warehouses in the U.K. with initial guide prices totaling 435 million pounds (U.S. $536 million).
The Times report said the properties being sold were acquired as part of the company’s $13 billion acquisition of Liberty Property Trust and do not fit Prologis’ investment strategy.
In a statement to FreightWaves, Prologis’ Director of Corporate Communications Paul Frankle said, “The planned sale of the Platform Portfolio, acquired as part of the Liberty Property Trust transaction earlier this year, represents a rare opportunity to acquire a U.K.-wide logistics portfolio as demand for logistics real estate continues to increase. The portfolio includes a number of stand-alone logistics properties which fall outside our core U.K. investment strategy of logistics park ownership. The future sale of these non-core assets, which will be the largest disposal of a logistics portfolio in the U.K., will complete our efforts to realign our U.K. portfolio with our long-term investment strategy.”
The Liberty deal included 519 industrial properties with nearly 100 million square feet of space, bolstering Prologis’ footprint in the key industrial logistics markets of the Lehigh Valley and central Pennsylvania, Chicago, Houston, New Jersey and Southern California.
In its May 1 first quarter filing with the U.S. Securities and Exchange Commission, Prologis stated there were roughly 34 million square feet of “non-strategic” space acquired in the Liberty deal that the company doesn’t plan to operate on a long-term basis. The filing listed 42 million square feet of space with a gross book value of $3 billion held over from the Liberty and Industrial Property Trust acquisitions as non-strategic.
The Platform Portfolio sale is expected to be the largest recorded in the U.K., attracting bidders from around the globe. The report placed the annual rental income at 25 million pounds (U.S. $31 million) with major U.K.-based tenants like grocery and merchandise retailer Tesco (LSE: TSCO) and tradetools and hardware chain Screwfix (Kingfisher: LSE: KGF).
At the close of 2019, Prologis listed its U.K. portfolio at a gross book value of $3.73 billion.
London-based property consultancy firm DTRE was reported to be advising Prologis on the portfolio sale.
Prologis is a San Francisco-based REIT with an industrial real estate portfolio exceeding $90 billion in gross book value and total expected investment. The company’s nearly one billion square feet of owned and managed properties span 19 countries, serving 5,500 customers. Many of its warehouses in the U.S. service ports on both coasts, regional distribution hubs and rail and intermodal facilities.
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