Back to top

Analyst Blog

As part of its effort to boost its international business, Prologis Inc. (PLD - Analyst Report) is setting up a real estate investment trust in Japan through Nippon Prologis REIT Inc. (NPR). The company would be sponsoring NPR exclusively and would keep a minimum of 15% ownership stake in it.

In addition, Prologis, which is a leading owner, operator and developer of industrial real estate in the U.S., would provide 12 of its Class-A properties in Japan to NPR for creating its initial portfolio. Valued at around JPY 173 billion ($2 billion), the assets span 9.6 million square feet. With an average age of 3.4 years, these assets are strategically located in global markets of Tokyo and Osaka.

NPR would function as a long-term investment medium for logistics facilities. Tokyo Stock Exchange has already given a nod to NPR for its listing. Moreover, according to a Reuters report, in its initial public offering, NPR plans to sell shares worth JPY 91 billion ($1.04 billion).

NPR enjoys sole negotiation privileges for eight additional properties that are owned by Prologis. Further, it would get pipeline, operational and personnel aid as par a sponsor support agreement. Also, Prologis’ wholly owned subsidiaries would offer property and asset management supports to NPR.

As a matter of fact, the industrial property market in Japan is showing signs of stability that was held back by the devastation and loss caused by the earthquake and tsunami. The deal signifies Prologis’ motive to capitalize on the opportunity and meet the improving property values and growing institutional demand for quality properties.

Prologis also signed four new lease agreements spanning about 1.1 million square feet in Japan in November. The deals were penned with existing clients for an undisclosed amount. Also, in December, it inked a definitive deal with Norges Bank Investment Management (NBIM) to create a Euro-denominated JV: Prologis European Logistics Partners Sàrl. We believe such strategic efforts would provide prospect for top-line expansion and hence we remain encouraged.

Prologis is expected to release its fourth-quarter 2012 results on February 6, 2013. The Zacks Consensus Estimate for the company’s fourth quarter FFO is currently pegged at 41 cents per share. It currently has a Zacks Rank #2 (Buy). One of its peers, Winthrop Realty Trust (FUR - Snapshot Report), has a Zacks Rank #5 (Strong Sell).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
GTT COMMUNI… GTT 11.65 +4.11%
ALLERGAN IN… AGN 161.82 +3.99%
CLAYTON WIL… CWEI 117.06 +3.73%
GREENBRIER… GBX 69.63 +2.37%
RF MICRO DE… RFMD 12.02 +2.04%