Norway’s SWF Buys 50% of Logistic Property Portfolio from Prologis

Posted on 12/20/2012

The press release states, “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.”

Read more: Norges Bank Press Release

Keywords: Norway Government Pension Fund Global.