Prologis Inc., the world's biggest owner of industrial real estate, has teamed up with Norway's sovereign wealth fund, Norges Bank Investment Management, to acquire KTR Capital Partners for $5.9B, reports The Real Deal.
KTR Capital Partners owns around 70 million square feet of real estate in 25 markets, but more especially, in areas such as South Florida, California, New Jersey, Chicago, and Texas.
The acquisition deal to be made by Prologis U.S. Logistics Venture and the Norway fund will also assume the $700 million in secured mortage debt by KTR Partners, notes Bloomberg. Aside from the assumption of debt, Prologis will issue limited partnership units worth $230M to the seller, adds the site.
With this deal, Prologis explained in a statement that it will be able to strengthen its market especially in Florida, California, New Jersey, Chicago, Dallas and Seattle. Hamid Moghadam, Prologis' CEO and chairman, expressed his optimism in this recent deal.
"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," he said via Bloomberg.
The CEO of Prologis, a company which owns several warehouses and retail-distribution centers, is confident that the KTR acquistion deal will bring forth earnings for the company and shareholders alike, reports Reuters. "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," Moghadam said, as noted by Reuters.
Prologis, a company who has about $22B worth of market value, is anticipating that their value per share will increase because of the recent deal, states Bloomberg. The company reportedly estimates that the increase could be as much as 14 cents per share on a "stabilized basis." On Sunday, Prologis also issued a separate statement, saying that its "first quarter's core funds from operations rose 14 percent from a year earlier to 49 cents a share," notes the news site.
Meanwhile, Norges Bank Investment Management, with assets worth $882B, is reportedly growing its real estate holdings in Asia, particularly Singapore and Tokyo, as its way of managing the fund better amidst low oil prices, Bloomberg reports in March.
Commercial real estate industry will continue to rise until 2017, according to a Washington D.C. based-Urban Land Institute survey cited by The Dallas Morning News. Thus, we would expect more commercial real estate investors to expand their portfolio. Less than two weeks ago, the Blackstone Group and Wells Fargo, reportedly purchased GE's real estate investments portfolio worth $23B.
