Prologis Inc. (
, an industrial real estate investment trust (REIT), has recently
signed a new agreement to lease a facility which spans a total of
401,523 square feet, in Sao Paulo, Brazil. The deal was penned with
an unnamed logistics provider for an undisclosed amount.
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With the improvement in property values and growing institutional
demand for quality properties, Prologis has taken up efficient
leasing decisions that were earlier postponed due to volatility in
the markets. The company, which focuses on leasing distribution
space to high-class tenants, has a cluster of U.S. based tenants -
Amazon.com Inc. (
The Home Depot, Inc. (
Anixter International Inc. (
The industrial property market in Brazil, mainly in Sao Paulo, is
growing on the back of increasing demand. In 2011, the demand for
industrial space in Sao Paulo continued to grow with overall
vacancy rate (stand-alone and industrial parks) falling from 8.7%
to 5.8%, despite new developments.
The current facility leased by Prologis is a part of their
development portfolio - Prologis CCP Jundiai Industrial Park,
located in Jundiai submarket of Sao Paulo in Brazil. The park has
easy access to Avenida Hermengildo Tonolli and is located in
between the municipalities of Campinas and Sao Paulo. When fully
built out, the facility is expected to total approximately
1,622,992 square feet of industrial space. With the deal, Prologis
CCP Jundiai Industrial Park is fully pre-leased.
The project is a joint venture with Cyrela Commercial Properties
(CCP) - one of the leading commercial real estate companies in
Brazil, focusing on the development and acquisition of high-quality
office buildings, shopping malls and distribution centers. The
development property is expected to meet the highest functionality,
flexibility, and accessibility standards by incorporating the
technical know-how of CCP and expertise of Prologis, the world
leader in the acquisition and development of Class A industrial
In addition, Prologis has also witnessed a growing customer
interest in new build-to-suit development projects across the
globe. Last week, the company signed a new build-to-suit agreement
with Rakuten Inc., which spans about 810,000 square feet in Osaka,
Japan, for an undisclosed amount.
Prologis acquires, develops, operates and manages industrial real
estate space in North America, Asia and Europe. As of June 30,
2012, the company owned properties and development projects
spanning approximately 569 million square feet across 21 countries.
We presently have a long-term Neutral recommendation on the stock.
It also carries a Zacks #3 Rank (a short-term Hold rating).