), a leading industrial real estate investment trust (REIT), has
recently signed a lease agreement spanning 139,000 square feet of
its development portfolio in the UK with Dalepak Limited, a
third-party logistics service provider, for an undisclosed amount.
The lessee would occupy the space at Prologis Park Pineham DC139,
which is located in between Birmingham and London in
With the lease, Dalepak would presently occupy about 340,000
square feet of space in Northampton and the leased facility would
house its new headquarters. The distribution warehouse would
provide immediate access to the national motorway network and
primary consumer markets of the region, thereby enabling Dalepak to
better serve its UK business.
In addition, the leased distribution center possesses a
sustainable industrial design, with an 'Excellent' accreditation
from BREEAM (Building Research Establishment Environmental
Assessment Method) and an Energy Performance Certificate (EPC)
rating of 'B'. The EPC provides ratings from 'A' to 'G', wherein
'A' indicates the most energy-efficient building. As a result, the
leased facility is expected to augment the sustainable initiatives
of Dalepak in the long run.
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 Dalepak, who remain 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
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
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
Winthrop Realty Trust
), one of the peers of Prologis.
WINTHROP REALTY (
): Free Stock Analysis Report
PROLOGIS INC (
): Free Stock Analysis Report