Euronext-listed Prologis European Properties has agreed to sell two-thirds of its 30% stake in Prologis European Properties Fund II (PEPF II) to the firm's Denver-based mother company Prologis for about EUR 43 mln. It is also seeking to dispose of the remaining 10% interest in the fund to a third party.
Euronext-listed Prologis European Properties has agreed to sell two-thirds of its 30% stake in Prologis European Properties Fund II (PEPF II) to the firm's Denver-based mother company Prologis for about EUR 43 mln. It is also seeking to dispose of the remaining 10% interest in the fund to a third party.
Prologis European Properties said it will save EUR 348 mln of future equity commitments due to the sale of its current and future commitment to PERP II to Prologis. The final purchase price will be adjusted to reflect the fourth quarter distribution, expected to be received in February 2009, from PEPF II. The net proceeds from the sale will be used to pay down debt. The sale is expected to be completed by 22 December 2008.
PEPF II is a private equity fund established by Prologis to acquire assets from both Prologis' development pipeline in Europe and from third parties. In August 2007, Prologis European Properties committed EUR 900 mln over a three-year period to PEPF II, in exchange for a 30% stake. The sale to Prologis in Denver will decrease Prologis European Properties' ownership in PEPF II to 10%. This equates to a total gross commitment of EUR 300 mln, of which EUR 125.9 mln or 42% has already been invested.
Prologis European Properties said it has retained M3 Capital Partners to market the remaining one-third stake in the fund to third-party investors.
New York-listed is the largest owner, manager and developer of distribution facilities in the world, while its European operation, Prologis European Properties, is the largest owner of modern distribution centres in Europe.
Like most other listed real estate in the US and Europe, Prologis has seen its share price plummet this year. Jeff Schwartz resigned as CEO in November and was replaced by Walter Rakowich as the company announced it was curtailing its development pipeline drastically in response to the global financial crisis.
