ProLogis, the world's largest developer of industrial property, will sell its operations in China and 20 percent of its Japanese property fund interests to GIC Re, a real estate investment company owned by the Singapore government. ProLogis will receive $1.3 billion in cash for the assets, and will use the proceeds to reduce debt. The deal was set to close by the end of January.
ProLogis's current Chinese staff will remain in place, and its portfolio will stay unchanged, though the company will not be involved with the properties, a company spokeswoman said. She added that the decision to exit China and scale back in Japan "is not a market call. Business is softening everywhere, but the decision ... was more a function of the scope of our exposure [in Asia] and the ability to accomplish a significant portfolio sale quickly."
Among the assets in China to be sold are 20.7 million square feet of completed properties and properties under development. ProLogis expects to have invested $861 million in those assets. As of Sept. 30, 2008, ProLogis had 548 million square feet owned, managed, and under development worldwide.