Prologis Merges 2 European Funds

By Barbra Murray, Contributing Editor

San Francisco—Prologis Inc. just made its first major move in Europe this year. The San Francisco-based global logistics real estate company revealed that it will merge Europe Logistics Venture 1, a joint venture involving Germany’s Allianz, with its Prologis Targeted Europe Logistics Fund. PTELF will acquire ELV1 in a transaction valued at more than $611 million (€571 million).

François Trausch, CEO of Allianz Real Estate

Established in 2011, ELV1 boasts a portfolio sited in high-growth, high barrier markets in Germany, France and the Netherlands. The properties will be incorporated into PTELF, a pan-European core open-end fund launched in 2007. However, there will be no disadvantageous overlapping to contend with in this union; ELV1’s assets are primarily complementary to the PTELF portfolio.

Per terms of the agreement, Allianz acquired Prologis’ 15 percent stake in ELV1, and Prologis pocketed approximately €183 million of net proceeds–in cash. The joining of the two European funds marks a bolstering of the partnership between Prologis and Allianz in a win-win situation all around. “Allianz meets its investment objective by deploying more capital in European logistics real estate, existing investors in PTELF benefit from improved scale, a stronger balance sheet and greater liquidity, and Prologis further streamlines its strategic capital business,” Gary Anderson, CEO, Prologis Europe and Asia, said in a prepared statement.

According to Prologis’ third quarter supplementary report, the logistics property owner and developer owns a 28.7 percent interest in PTELF. Allianz will become the fund’s largest investor.

“By contributing ELV1, its prior and successful joint venture with Prologis into PTELF, Allianz will gain exposure into a larger, more liquid portfolio with greater diversity, at a time when the industry is also consolidating,” François Trausch, CEO of Allianz Real Estate, noted in prepared remarks.