GLOBAL - ProLogis is to wind down its listed €3.5bn ProLogis European Properties (PEPR) fund a year after it thwarted a bid by a consortium led by Dutch pension fund manager APG to remove it as fund manager.
The announcement of the fund’s planned demise came after PEPR minority shareholders agreed at its AGM last week to a proposal appointing ProLogis as the fund’s liquidator.
The firm, as owner of more than 1% of the fund, opted for in specie rather than cash distribution - a move it said would avoid deferred tax liabilities and swap breakage costs totalling €142m, were the fund’s 210 assets to be sold.
ProLogis is likely to transfer the assets, collectively valued at €3.5bn at the end of March, into its other European logistics funds, including the €3.7bn PEPR II and two funds acquired with last year’s merger between ProLogis and US firm AMB.
Results of a more recent valuation carried out at the end of last month will not be disclosed until publication of the firm’s full results at the end of July.
In recent months, PEPR has sold off 18 UK, Polish and German assets worth €255m in a bid to pay down its debt and generate cash.
In February, it divested 10 UK logistics assets from the fund as part of a 13-asset portfolio sold to private equity firm Blackstone for $335m (€242m).
ProLogis upped its shareholding in the fund to around 99% from 92% last year after acquiring the shares of APG and a subsidiary of sovereign wealth fund the Government of Singapore Investment Corporation.
The two investors had been members of a consortium that had attempted to replace ProLogis as fund manager with Goodman, citing a potential conflict of interest.
A source close to the company suggested winding down PEPR had “made sense” after the departure of its second largest shareholder.