Prologis has announced the pricing of 182,350 units at a price of JPY550,000 per unit of Nippon Prologis Reit (NPR), a Japanese real estate investment trust.
The offering was priced at the high end of the range and comprised a domestic placement of 109,410 units (60 per cent of units outstanding) and an international placement of 72,940 units (40 per cent of units outstanding).
Prologis is contributing 12 Class-A properties in Japan to NPR for initial consideration of approximately JPY173bn (USD1.9bn). The sale of the assets is expected to be completed on 15 February.
Inclusive of NPR's concurrent borrowings, net cash proceeds to Prologis from the sale are expected to be JPY153bn (USD1.7bn), before the greenshoe option. Prologis intends to use the proceeds primarily for the repayment of debt and future investment in Japan.
The portfolio, with a weighted average age of 3.4 years, totals 9.6 million square feet (890,000 square meters), and is principally located in its global markets of Tokyo and Osaka. NPR has exclusive negotiation rights for eight additional properties owned by Prologis, and will receive pipeline, operational and personnel assistance under a sponsor support agreement. In addition, wholly owned subsidiaries of Prologis will serve as NPR's property and asset managers.
Prologis will initially hold 20 per cent of NPR and if the greenshoe option of 9,118 units is exercised in full, Prologis' investment will be reduced to approximately 15 per cent. NPR is expected to list on the Tokyo Stock Exchange on 14 February 2013.