Prologis buys Liberty trust for $12.6bn in another big property deal


There has been yet another enormous deal in logistics property this week. US warehousing developer, Prologis, announced yesterday (28/10/19) that it has bought Liberty Property Trust. In a statement the company said that it had “entered into a definitive merger agreement with Liberty Property Trust by which Prologis will acquire Liberty in an all-stock transaction, valued at approximately $12.6bn, including the assumption of debt”.

Liberty Property Trust has a large warehousing portfolio both in the US and in the UK, which Prologis said amounted to 107 million sq ft and a development pipeline of 5.1 million sq ft. In addition, it has 4.9 million square feet of office property.

Prologis indicated that it would rationalise the Liberty Property portfolio, disposing of “approximately $3.5bn of assets on a pro rata share basis. This includes $2.8bn of non-strategic logistics properties and $700m of office properties”.

This deal is not quite as large as the $28bn that investment company Blackstone has spent in the US warehousing market, but it still marks Prologis as not just one of the US’ largest but one of the World’s larger logistics property companies. It follows on from Prologis’ purchase of Industrial Property Trust for $4bn earlier in the year.

The deal suggests that property investors remain very bullish on the prospects for internet retailing. It is notable that the focus for this development is the US, which already has a developed e-retailing sector with a major warehouse property purchaser- Amazon- as well a large volume of the sort of fulfilment space that e-retailers need. Presumably the likes of both Prologis and Blackstone think that the expansion will continue, an opinion possibly supported by the high utilisation rates seen in the US over the few years.

Of course, this might ask questions about the prospects for other markets. The US is generally one of the more advanced markets in terms of internet retailing. If the market for warehousing is still buoyant after the level of growth seen in the US, how much more potential is there is other markets which have seen lower levels of internet retailing volume so far?

Source: Transport Intelligence, October 29, 2019

Author: Thomas Cullen