Brookfield Property Partners LP (BPY-U), the commercial real estate company that was spun off by its Canadian parent earlier this year, agreed to purchase U.S. industrial-property assets from Japan’s Kajima Corp. (1812) for $1.1 billion.
Brookfield Property will buy about 25 percent of Kajima’s Industrial Developments International Inc., with the balance owned by its institutional partners, the Hamilton, Bermuda-based company said today in a statement. The deal includes more than 27 million square feet (2.5 million square meters) of operating assets and 49 million square feet of future space.
“The addition of IDI to Brookfield’s existing industrial operations will create a leading global industrial real estate company able to deliver high-quality distribution facilities to clients around the world,” Ric Clark, chief executive officer of Brookfield Property, said in the statement.
The company is expanding in industrial real estate, an area where it hasn’t previously had large investments, as global trade grows. The Kajima acquisition will increase its industrial portfolio to 62 million square feet of operating assets, with 79 million square feet available for future development. Brookfield agreed in June to buy a U.K. warehouse developer from Dubai World’s Economic Zones World unit.
Brookfield Property has previously focused on office and retail real estate, with stakes in more than 300 properties with about 250 million square feet. It owns about 50 percent of Brookfield Office Properties Inc. (BPO), lower Manhattan’s largest office landlord, and about 22 percent of General Growth Properties Inc. (GGP), the second-biggest U.S. mall owner.
Brookfield Asset Management Inc. (BAM/A), Canada’s largest manager of alternative assets, spun off Brookfield Property in April. It was the last of three main business units to be carved out by the Toronto-based company. After the spinoff, the parent held an effective economic stake of about 92.5 percent in the property unit, according to a regulatory filing.
The Kajima transaction is expected to be completed in the fourth quarter, Brookfield said. Industrial Developments International, an Atlanta-based unit of Kajima, owns 75 industrial-distribution facilities in 12 states in cities including Atlanta, Chicago, Cincinnati and the Dallas-Fort Worth area in Texas.
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