Nippon Prologis REIT, Inc. announces the sale of Prologis Park Joso, repurchase of investment units and revisions to its earnings forecasts

Nippon Prologis REIT, Inc. will sell Prologis Park Joso, a logistics facility in Joso, Ibaraki Prefecture, completed in 2014. The sale price is ¥8.7 billion, and the sale will be conducted in two phases. The buyer has not been disclosed. The fund decided to sell the property because its occupancy rate had remained in the 50% range since 2023.

The fund also announced the repurchase of its own investment units. This will be its second such repurchase, following the first in February 2025, with a limit of 130,000 units, or 1.5% of outstanding units, and a total acquisition cost of up to ¥10 billion. The repurchased units are scheduled to be cancelled at the end of November.

The earnings forecasts were revised to reflect the recording of gains on sale and other factors. For the 28th fiscal period, the fiscal year ending November 2026, the fund expects to record a ¥1,373 million gain on the sale of 50% of Prologis Park Joso and achieve a 9.3% increase in profit from the previous forecast. Investment units are expected to decline by 1.3% following the cancellation of the repurchased units, and distributions per unit are expected to rise 1.7% to ¥1,971, including distributions in excess of profit. For the 29th fiscal period, the fiscal year ending May 2027, the fund expects to record a ¥1,376 million gain on the sale of the remaining 50% and achieve a 9.3% increase in profit from the previous forecast.

In connection with the recording of gains on the property sale, the fund plans to reduce distributions in excess of profit to a certain percentage of depreciation expense. Distributions are therefore expected to increase. However, readers will need to monitor further updates and the feasibility of the plans.