Panasonic maker Matsushita Electric Industrial Co. has sold 17 large warehouses in Japan to the local unit of real estate developer ProLogis for about 85 billion yen ($735 million).

Matsushita also said it would boost production capacity for plasma display panels by 10 percent more than initially planned at a factory in western Japan in which it is investing 180 billion yen ($1.6 billion) to meet strong demand for flat TVs.

After rising more than 4 percent in early morning trade, shares of Matsushita ended up 1.4 percent at 2,180 yen, underperforming a 2 percent gain in the electronics subindex.

As Japanese corporations try to streamline their businesses and maximise resources, attention has been focused on real estate that represents a chunk of their balance sheets. As a result, many have redeveloped, leased or sold this fixed asset to boost profitability.

Matsushita, the world's largest consumer electronics company and its largest plasma TV maker, would invest the proceeds from the sale of its distribution centres in core businesses such as plasma screen TV operations, according to the Nikkei business daily.

The purpose of this is to reduce our overall assets and create a light management structure that leads to a more efficient use of assets, said Matsushita spokesman Akira Kadota, adding that the company had not decided how to use the proceeds.

According to management consultancy KPMG FAS Co., real estate accounts for one-third of total assets held by Japanese companies, and the cost of maintaining the property is high.

ProLogis, which started to invest in Japan in 2001, has been buying assets as demand for large and efficient distribution facilities remains strong. In April, the U.S.-based company purchased eight distribution centres from cosmetics group Shiseido Co Ltd.

The warehouses it bought from Matsushita are mainly used to store the company's electronics products.

Matsushita is keen to focus on its flat TV business as it faces tough competition with rivals such liquid crystal display maker Sharp Corp and South Korea's Samsung Electronics and LG Electronics Inc.

Matsushita said it plans to raise annual capacity at the No. 2 plasma display factory in Amagasaki, Hyogo prefecture, to the equivalent of 6.6 million 42-inch panels in 2008, up from about 2.2 million currently.

The company's previous plan was to raise output to 6 million units in 2008.

Matsushita rival Sony Corp has also been unloading non-core assets and businesses.

Sony earlier this year cut its holdings in a wide range of retail activities such as cosmetics and restaurants, and it will list its financial arm next week following a $3 billion IPO.

Sony also unveiled a plan to sell a plot of land on its former headquarters site to builder Sekisui House Ltd.