New-York listed distribution property giant Prologis is selling a Northern American logistics portfolio and other assets to Blackstone Real Estate Advisors for a total of $1.02 bn (EUR 732 mln). Prologis announced on Tuesday that it has entered into a definitive agreement with affiliates of Blackstone RE to sell the industrial portfolio, a minority interest in a hotel property and Prologis' interests in three of its property funds.

New-York listed distribution property giant Prologis is selling a Northern American logistics portfolio and other assets to Blackstone Real Estate Advisors for a total of $1.02 bn (EUR 732 mln). Prologis announced on Tuesday that it has entered into a definitive agreement with affiliates of Blackstone RE to sell the industrial portfolio, a minority interest in a hotel property and Prologis' interests in three of its property funds.

The combination of the transaction with Blackstone and dispositions and contributions of approximately $600 mln so far this year is expected to generate over $1.6 bn of gross proceeds, exceeding the company's previously announced expectation for 2010 of $1.3 to $1.5 bn, according to Prologis. The net proceeds will be used for the repayment of debt and to fund development activity.

During Expo Real in Munich earlier this month, Philip Dunne, CEO of Prologis Europe, told PropertyEU that the company was aiming to shift the global focus of its portfolio and leverage its 'vast' land bank. 'We have $2 bn of land on our balance sheet worldwide. We are seeking to put that land to work, with the emphasis today on built-to-suit opportunities. The goal overall is to rebalance our portfolio. The US currently accounts for about 90% of our business. In due course we aim to move to 50% in the US, 30% in Europe and 20% in Japan.'

In the past two years, the company has used the proceeds of equity raisings and disposals to pay down debts which were maturing between 2009 and 2011, Dunne added. 'In 2010, we have continued to focus on deleveraging, on leasing the completed development portfolio and filling any vacancy in our funds to bring occupancy above 94%. And we have gone back to development.'

Prologis is Europe’s largest owner of modern distribution facilities, and the company expects to focus on built-to-suit development opportunities for the foreseeable future. Dunne: 'In the future we will no doubt return to speculative development and have a greater mix of the two, but I think speculative development is still some way down the line.'

Click on the link below to watch Philip Dunne’s interview with PropertyTV at Expo Real.