Prologis, Inc. PLD, the San Francisco, CA-based industrial real estate investment trust, announced that its Japanese subsidiary, Nippon Prologis REIT, Inc. (“NPR”), will issue new investment units. The new investment issuance is estimated to generate proceeds worth JPY 24.3 billion ($215 million). NPR plans to utilize these proceeds to repay the bridge loans that it had taken for the acquisition of 4 Class-A properties for around JPY 42.1 billion ($372 million).
The properties under consideration, totaling around 2.3 million square feet, will be acquired from a wholly owned Japan portfolio of Prologis. The acquisition is likely to close on Mar 3, 2016 in Japan.
We note that Prologis acquires, develops, operates and manages industrial real estate space in the Americas, Asia and Europe. The company principally targets investments in distribution facilities for customers who are engaged in global trade and depend on the efficient movement of goods through the global supply chain.
Prologis came up with fourth-quarter 2015 core funds from operations (“FFO”) per share of 64 cents, beating the Zacks Consensus Estimate of 62 cents and improving from the year-ago quarter figure of 48 cents. Results were driven by growth in revenues and occupancy gains. Further, last week, ushering in good news for its shareholders, Prologis approved a 10.5% hike in its annualized dividend rate to $1.68 from its 2015 payout. This has also led to an increase in the quarterly dividend to 42 cents per share from the prior-quarter figure of 40 cents.
Prologis currently has a Zacks Rank #2 (Buy).
Investors interested in other REIT stocks, may consider CorEnergy Infrastructure Trust, Inc. CORR, Lamar Advertising Co. LAMR and CoreSite Realty Corporation COR. While both CorEnergy Infrastructure Trust and Lamar Advertising sport a Zacks Rank #1 (Strong Buy), CoreSite Realty holds the same Zacks Rank as Prologis.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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