Prologis raises €450m for European logistics fund
NORTH AMERICA – Prologis has raised €450m for its core logistics fund, the Prologis European Properties Fund II, opening the fund to investors for the first time.
James Green, managing director of global client relations, said: "We had started the capital raise about a year ago, and we thought it would take us through the end of 2013. We actually finished it one full quarter ahead of schedule."
The real estate manager did have to turn some investors away, after it reached the equity-cap offering for the new capital raise.
Green declined to specify the amount of capital that was not placed into the fund.
One of the biggest investors in Fund II was the New Jersey Division of Investment.
The pension fund made a €140m commitment to the fund in July.
Prologis's latest capital raise marked the first time the manager has opened the fund for new commitments since its inception in 2007.
Around 70% of the capital for the new raise came from new investors.
Prologis made a €125m co-investment into the new capital raise.
The fund targets net leveraged IRRs in the range of 9% to 10%.
Fund II – which currently owns assets in Belgium, Czech Republic, France, Germany, Hungary, Italy, the Netherlands, Poland, Slovakia, Spain, Sweden and the UK – buys core logistic properties in Europe.
The current portfolio includes 222 properties totaling 5.2m square meters, as of the end of June.
In a board-meeting document, New Jersey said the portfolio in Fund II was 96% leased at the time of its commitment.
Prologis has cited the "very strong" operating fundamentals of the European logistics market.
"This region of the world has very strong demand," Green said.
"There is going to be a 20% rental rate growth over a five-year period.
"One of the reasons for this is a lack of new supply being added to the market, which improves the performance of the existing properties."