), a leading industrial real estate investment trust (REIT), has
recently signed a new lease agreement spanning about one million
square feet in the U.K., for an undisclosed amount. The deal was
penned with Sainsbury's Supermarkets Ltd, a premier retailer and
the third largest supermarket chain in the country.
Prologis would construct a build-to-suit facility for Sainsbury's
at the Daventry International Rail Freight Terminal (DIRFT), a
rail-road intermodal freight terminal with an associated
warehousing estate. The proposed construction is slated to come
up within the Prologis DIRFT II development site in Daventry and
scheduled to commence in early 2013.
The fully built DIRFT II project is expected to encompass 2.2
million square feet. The facility is strategically located
alongside the M1 motorway and the West Coast Mainline railway,
offering both road and rail connectivity. In addition, a new
intermodal terminal connecting the existing DIRFT railway sidings
is due to be installed next to the building. Consequently, the
distribution center is expected to provide unmatched
communication facilities to the lessee.
Besides its locational advantage, the facility is designed to
achieve a "Very Good" accreditation from Building Research
Establishment Environmental Assessment Method (BREEAM). BREEAM
sets the standard for the best practice in sustainable building
design, construction and operations. Furthermore, the project is
expected to receive the best possible Energy Performance
Certificate (EPC) ranking based on its energy efficiency
The agreement showcases the inherent high quality of the
properties of Prologis and signifies a growing demand for Class A
logistics space in the U.K. Earlier in the month, Prologis had
signed a new build-to-suit agreement in the U.K. to construct a
turnkey distribution center spanning about 300,000 square feet
for Network Rail. Additionally, in May and September 2012,
Prologis had signed two build-to-suit agreements to construct a
new e-commerce distribution hub spanning 473,000 square feet and
810,000 square feet of distribution space respectively, in Osaka,
With improving property values and growing institutional demand
for quality properties, Prologis has witnessed a growing customer
interest in new 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.
Prologis acquires, develops, operates and manages industrial real
estate space in North America, Asia and Europe. As of June 30,
2012, Prologis had approximately 18 million square feet of
logistics and distribution space in the U.K.
We currently have a Neutral recommendation and a Zacks #2 Rank
for Prologis, which translates into a short-term Buy rating. We
also have a Neutral recommendation and a Zacks #3 Rank
(short-term Hold rating) for
Winthrop Realty Trust
), one of the peers of Prologis.
WINTHROP REALTY (FUR): Free Stock Analysis
PROLOGIS INC (PLD): Free Stock Analysis
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