Prologis CEO: Why We’re Excited About ‘Abenomics’
As Japan's Prologis REIT, a real estate trust, made its debut on the Tokyo Stock Exchange on Thursday, Prologis' CEO told CNBC that he was excited about the radical economic policies of Japan's new Prime Minister Shinzo Abe.Prologis owns, operates and develops industrial real estate globally.
The Japan Prologis REIT began trading in Tokyo on Thursday following a 100.3 billion yen ($1.08 billion) initial public offering (IPO). The stock was priced at 550,000 from a range between 510,000 and 550,000 yen.
(Read More: Prologis Prices its Real Estate Investment Trust in Japan)
"The timing has certainly has been fortunate for our listing. But there are some long-term fundamental drivers happening in Japan that are very good for our business and I'm even more excited about those than I am about the particular timing," said Hamid Moghadam, CEO of Prologis.
The listing of the Prologis REIT comes against a backdrop of a booming Japanese stock market. The benchmark Nikkei stock index has surged about 44 percent since mid-November in a move that has coincided with efforts by Japan's new government to revive the economy and end years of deflation. Abe's economic policies, referred to as "Abenomics," have gathered much attention in financial markets.
Last month, the Bank of Japan adopted a 2 percent inflation target and is expected to pursue a more aggressive monetary policy than it has done in the past.
On CNBC Asia's "Squawk" Box, Moghadam said investors often misjudge Japan's investment appeal, adding that the company planned to reinvest almost all the proceeds from the IPO in Japan.
"Most people focus on (Japan's) declining and aging population and flat GDP profile of the last 20 years. What we focus on is the change from a manufacturing and export economy to more of an import/consumption economy. The supply chain required to service these two types of businesses is vastly different," he said.
"Also the new buildings in the modern world of e-commerce and e-logistics are very different from the old buildings that existed here. Around 2 percent of the stock in warehouse areas is suitable for modern logistics – that area is growing, the other 98 percent is declining. We benefit from that 2 percent segment that is growing rapidly," he added.
Prologis first set up shop in Japan in 1999 and has since captured a 44 percent market share, according to the CEO.
The company's Japanese business is expected to benefit from growing demand for modern warehouses as online shopping in Japan gains ground.
"We have grown from almost nothing to in excess of $5 billion of existing properties that we have developed. With a little bit of growth we will do even better," Moghadam said.
Data released on Thursday showed Japan's economy contracted 0.1 percent between October and December, from the previous quarter, against expectations for a 0.1 percent rise. The decline added weight to Japan's more recent push to revive growth through radical policies.
(Read More: Japan Economy Still in Recession, but Pick Up Coming)
Moghadam added that the company's European business was also a key area of growth.
"We have seen the European business experience positive demand and absorption, which is contrary to what people think of Europe. In the last few months we have seen firming in the UK, Germany and the Nordics. The remaining pockets of weakness are in the Southern peripheries, but even those economies seem to have bottomed," he said.
(Read More: Why It's Time to Underweight Japan)