Prologis And CBRE Form New Development Venture In U.K.

(RTTNews) - Prologis Inc. (PLD) and CBRE Global Investment Partners, a division of CBRE Global Investors announced the formation of a new development venture in the United Kingdom.

The venture, called Prologis UK Logistics Venture or UKLV, will pursue a develop-to-own strategy focusing on prime UK markets in the East and West Midlands, London and the South East. UKLV will acquire land, develop buildings and operate and hold logistics real estate.

The venture will be seeded with a 7.6 million square foot portfolio of stabilized properties, developments in progress and land, with an initial closing of approximately 3.9m square feet. UKLV will be structured as a 15/85 joint venture with 15 percent owned by Prologis and 85 percent owned by clients of CBRE Global Investment Partners, with total expected value of approximately 1 billion pounds or $1.26 billion.

Prologis currently owns and operates 23 million square feet in 97 buildings in the UK market. The formation of this venture demonstrates investor confidence in the continuing strength of the UK logistics property market. Strong demand in the UK for logistics real estate is driven by consumption, e-commerce and supply chain modernization.

Prologis' business strategy in Europe is to hold properties in a series of funds. UKLV is an extension of this strategy and will be the first venture dedicated to the UK market, as Prologis' existing Pan-European funds already have significant allocations to UK properties.

The transaction is expected to close at the end of February.