Prologis Inc.
(
PLD
), a leading industrial real estate investment trust (REIT), has
recently signed a lease agreement spanning 540,000 square feet of
its development portfolio in the Netherlands with Syncreon, a
worldwide logistics service provider, for an undisclosed amount.
The lessee would occupy the space at Prologis Park Tilburg, which
is located in the Industrial Park Vossenberg-West, northwest of
Tilburg, and consists of three state-of-the-art distribution
facilities totaling about 1.3 million square feet of warehouse
space.
The transaction is one of the largest of its kind in the country
in the current year. With the lease, Syncreon is expected to better
serve the European business of an undisclosed international
computer manufacturer. The leased facility is strategically located
in the south-central part of the Netherlands near the Belgian
border and facilitates multimodal transport at a midpoint between
Rotterdam and the German industrial zone, thereby offering a
significant growth opportunity for the logistics company.
On the other hand, the lease agreement enables Prologis to
expand and cement its strategic ties with leading third-party
global logistics service providers like Syncreon, which remains
focused on improving supply chain efficiencies through the lease-up
of functional and modern distribution space. Consequently, the
lease agreement is a win-win deal for both the participating
companies.
Prologis acquires, develops, operates and manages industrial
real estate space in North America, Asia and Europe. Given its
international presence, Prologis has lately faced unfavorable
foreign currency movements and other economic fluctuations that
have impaired its top-line growth.
Furthermore, although third quarter 2011 results exceeded the
Zacks Consensus Estimates, macroeconomic issues had contributed to
a slower pace of recovery as the industry was affected by the
continued concerns about sovereign debt issues, rising energy
costs, global military actions and the devastation and loss caused
by the earthquake and tsunami in Japan.
In addition, the unrelenting troubles in the residential sector
are weighing on commercial property operations. The credit crunch
has also widened the bid-ask spread between buyers and sellers of
commercial real estate, which has caused deal volumes to fall
compared to pre-recession levels. Moreover, market vacancy
increases is expected to mitigate Prologis' ability to push through
rental rate increases, thereby affecting the long-term growth of
the company.
We currently have a 'Neutral' recommendation and a Zacks #3 Rank
for Prologis, which translates into a short-term 'Hold' rating.
However, we have an 'Outperform' recommendation and a Zacks #3 Rank
for
Winthrop Realty Trust
(
FUR
), one of the peers of Prologis.
WINTHROP REALTY (
FUR
): Free Stock Analysis Report
PROLOGIS INC (
PLD
): Free Stock Analysis Report
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