ProLogis, a globalprovider of distribution facilities, is selling its entireoperation in China and 20% interests in its Japan funds for $1.3billion, plus liabilities assumed as part of the transaction. Theglobal REIT is reducing its debt and is expecting a net loss of 4%to 6% of the book value of the sold assets. ProLogis will see areduction in its development pipeline by roughly $1.0 billion,which will include $255 million in completion costs fordevelopments within its China JV. GIC is the REIT arm of thegovernment of Singapore Investment Corp.

"In one substantial step, this transaction helps ProLogisde-lever its balance sheet, relieve near-term re-financing pressureand enhance liquidity," says Walter C. Rakowich, CEO of Prologis,in a statement. Continuing, Rakowich points out that the sale is astep toward ProLogis' larger goal of strengthening the company'sbalance sheets in the rough economic climate.

According to ProLogis, the China assets include: 20.7 millionsquare feet of completed properties and properties underdevelopment with a total expected investment of $861 million, whichincludes a remaining funding requirement of $223 million forproperties under development; ProLogis' interest in five China JV'sand a single property fund; a 30% interest in SZITIC CP, a retailJV with a book value of $53 million; and 713 acres with a carryingvalue of $213 million. In Japan, ProLogis will sell 4.5 millionsquare feet of facilities completed and fully-leased totaling $687million of investment; 4.2 million square feet of facilities underdevelopment with a total expected investment of $681 million; and64 acres of land worth $173 million.