In a bid to expand its European platform,
) penned a Build-to-Suit deal with Hi Logistics, a specialist
logistics subsidiary of LG Electronics. In addition, the company
would develop two speculative facilities. In total, the three
buildings will span over 700,000 square feet.
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Particularly, the Build-to-Suit deal with Hi Logistics will span
165,000-square-foot and will be positioned at the key
distribution hub, Prologis Park Ryton in the West Midlands. It
will be the regional distribution center for the customers of Hi
Logistics. The company will also develop a 225,000-square-foot
speculative facility at the park.
The other facility will be located at Prologis Park Dunstable and
span 310,000-square-foot. This facility is in close proximity to
the primary north-south transit corridor of the country and is
well connected to the London Luton Airport.
With a larger customer base and supply chain consolidation, the
demand for well-positioned, Class-A logistics facilities remains
high. Moreover, the pace of new units' construction is low. It is
this demand-supply disparity that is set to define the market
dynamics in the near term. With a capacity to offer modern
distribution facilities in strategic infill locations, Prologis
is set to gain from this.
With about 17 million square feet of logistics and distribution
space as of Jun 30, 2013, Prologis has a solid foothold in the UK
industrial real estate market. Its portfolio is more than 97%
leased that reflects the strong demand for its facilities. Also,
the deal depicts Prologis' effort to strengthen its ties with
existing customers such as Hi Logistics that already occupies
Prologis facilities in The Netherlands and Poland.
Prologis currently carries a Zacks Rank #3 (Hold). Some better
performing REITs include
Highwoods Properties Inc.
SL Green Realty Corp.
), all carrying a Zacks Rank #2 (Buy).