Home Commercial Mapletree Investments Spends $185MM to Purchase Five Industrial Properties in Kent From...

Mapletree Investments Spends $185MM to Purchase Five Industrial Properties in Kent From Prologis; Part of $1.1B International Logistics Portfolio Acquisition

By Jack Stubbs

As the Puget Sound region’s industrial market continues to grow and expand, international investors and real estate developers continue to eye the area favorably.

And on Monday, October 1st, Singapore-based Mapletree Investments Ltd., a leading real estate development, investment, capital and property management company, purchased five industrial properties in Kent—as part of three separate transactions—totaling just over one million square feet square feet for approximately $185.3 million from San Francisco-based Prologis Inc., a leading developer of industrial properties throughout the Puget Sound region.

Neither the buyer nor the seller responded to emailed requests for comment about the transactions in time for the publishing of this story.

The acquisitions in Kent were part of a larger international logistics portfolio acquisition, according to a statement on the buyer’s web site. On October 3rd, Mapletree announced the acquisition of a 16.5 million square foot logistics portfolio for $1.1 billion from Prologis. Mapletree is embarking on a syndication of European and U.S. Logistics assets, and the portfolio acquisition marks the company’s deeper penetration into the two markets following earlier acquisitions of student accommodation, serviced apartments, commercial properties and data centers. The larger portfolio includes properties in major national logistics markets including Chicago, Dallas and Seattle, as well as internationally in France, Germany and Poland, according to the company’s web site.

“As an active capital manager, we have also embarked on a syndication of our European and US logistics assets to institutional and high net worth investors”, said Michael Smith, regional CEO of Mapletree Investments, said in the statement. “This acquisition is in line with Mapletree’s strategy to increase our global footprint as a logistics real estate provider and to venture beyond Asia—a strategy we have been executing since 2014,” Smith added. “With properties strategically situated in key distribution hubs, Mapletree is well-positioned to capitalise on the growing demand for modern logistics facilities and the thriving e-commerce sector globally.”

Locally in the Puget Sound region, the five assets in Kent—part of the Prologis Business Park—total 1,031,306 square feet, according to public documents. Buildings A, B, C and D, located at 20009 85th Ave. S. and 20213 89th Ave. S., were built in 1980 and sit on 58 acres. The four buildings comprise 588,000 square feet. The fifth property included in the transaction is a warehouse distribution center sitting on 19.5 acres—located at 27232 72nd Ave. S.—that was built in 1985 and totals 443,306 net square feet, according to King County records.

Founded in 2000, Mapletree Investments focuses on markets and real estate sectors with good growth potential, according to the company’s web site. Mapletree currently manages four Singapore-listed real estate investment trusts (REITs) and six private equity real estate funds, which hold a diverse portfolio of assets in Asia Pacific, the United Kingdom and the U.S.

As of March 31st 2018, Mapletree owned and managed approximately US$33.5 billion of office, retail, logistics, industrial, residential, corporate housing/serviced apartment and student accommodation properties, according to the company’s web site.

Founded in 1991, Prologis is the largest provider of industrial warehouse and distribution facilities in the Americas, according to the company’s web site. Prologis’ scale across the Americas allows it the company to provide its customers with a broad selection of top-quality facilities in strategic logistics locations. As of June 2018, Prologis owned or had investments 435 million square feet of industrial real estate space across 2,334 buildings and 3,087 acres of land, according to the company’s web site.

Prologis operates various industrial properties throughout the Puget Sound region, according to the company’s web site. Some of these include the two-story, 229,500 square foot Kent-Northwest Corporate Park 19 building in Kent; the 185,700 square foot Sumner 7 building; and the Trans-Pacific 3 project in Fife.

Prologis’ recent disposition of the properties in Kent follows a few weeks after the company made a sizable acquisition in Seattle. On September 6th, the company purchased a 10-acre property—including five Pepsi-owned office/warehouse buildings totaling almost 207,000 square feet—in the Mount Baker neighborhood of Seattle for $65 million or approximately $314 per square foot from the global real estate division of New York-based PepsiCo.

Kent has long been recognized as a hub of industrial and logistics activity in the Puget Sound region, and another distribution center changed hands in early September. On September 4th, CenterPoint Properties acquired a 294,912 square foot distribution center in Kent—located at 7650 S. 228th Street—for $49 million, or approximately $166 per square foot.

A second quarter 2018 Seattle Industrial Real Estate Market report written by Kidder Mathews indicates that the Puget Sound region’s industrial market could be set for more activity in the months ahead. Construction volume increase to 7,004,711 square feet (across 38 buildings) now under development compared to 6.1 million square feet across 24 buildings in first quarter 2018, according to the report. Second quarter also saw the delivery of 1.36 million square feet of new product, with the overall market supply standing at almost 333 million square feet.

The region’s overall vacancy rate held steady at 3.3 percent and there were 1.1 million square feet of leases signed in second quarter. With most of these not moving into their new spaces until the third or fourth quarters, the vacancy rate is expected to continue to approach 3 percent. As of second quarter, there were 7.1 million square feet under construction and another 14.4 million square feet in the pipeline, according to the report, which indicates that the region is poised for additional growth assuming the local economy continues to expand. Year-over-year from May 2017 to May 2018, the region’s employment grew by 3 percent, adding nearly 64,000 jobs.