US real estate fund sells off China assets

ProLogis, a US-based real estate investment trust (REIT), will sell its China operations and stakes in Japanese property funds to GIC Real Estate, which is owned by the Singapore government. The sale will reduce ProLogis’s development costs by US$1 billion. This includes US$255 million tied up in wholly owned or joint-venture projects in China, the Wall Street Journal reported. The company, which focuses on industrial facilities such as warehousing and factories, has halted its aggressive expansion strategy given the fall in demand and rise in its own debt exposure. ProLogis CEO Walter C. Rakowich said long-term expansion plans for Asia would not be affected. The transaction is expected to close in January and result in a net loss of approximately 4% to 6% of the book value of the assets sold.