San Francisco-based industrial real estate investment trust
), inked a build-to-suit agreement with Chinese logistics
provider, Deppon. The agreement is for 2 facilities aggregating
452,000 square feet in southern China.
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The proximity of this distribution center, which will be built at
the Prologis Dongguan Shipai Logistics Center, to the Congguan
Expressway that is scheduled for completion by year-end, would
offer direct access to key cities like Guangzhou and Shenzhen.
Notably, there is an increased demand for such facilities in
Dongguan, aided by economic growth, considerable manufacturing
base as well as domestic consumption. Prologis stands to benefit
as it has the capacity to offer modern distribution facilities in
strategic infill locations.
The new facilities would function as regional distribution
centers for the East Pearl River Delta area. It would include an
extended truck court, which would assist express inbound and
outbound operations of Deppon.
As a matter of fact, Deppon has been Prologis' client in the past
and this particular deal will extend Prologis' relationship with
Deppon to over 1 million square feet across 5 markets in China.
Prologis is significantly capitalizing on the growing
opportunities in build-to-suit development projects across the
globe. Additionally, leasing decisions that were earlier
postponed due to volatility in the markets are gradually coming
off the shelf. Also, the company has been actively spreading
itself worldwide through joint ventures.
As of Dec 31, 2012, the company had about 36.6 million square
feet of distribution space in Asia alone. Moreover, as of that
date, the company owned or had investments in, on a consolidated
basis or through unconsolidated joint ventures, properties and
development projects projected to total around 554 million square
feet in 21 countries. We believe such strategic moves will help
augment the company's top line going forward and provide upside
potential to its stock price.
Prologis currently holds a Zacks Rank #3 (Hold). Other REITs that
are performing well and are worth a look include
Ryman Hospitality Properties Inc.
Omega Healthcare Investors
), both of which carry a Zacks Rank #1 (Strong Buy) and
Cousins Properties Inc.
) that holds a Zacks Rank #2 (Buy).