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Prologis to Develop Logistics Facilities in Japan - Analyst Blog

Posted: 5/15/2014 10:50:00 AM
Referenced Stocks: GEO;PLD;REXR;TRNO

Industrial real estate investment trust (REIT) - Prologis Inc. ( PLD ) disclosed that it will develop three inventory logistics facilities in Japan. These facilities will span 3.2 million square feet of space and offer its clientele central distribution to Tokyo and the neighboring metropolitan area.

Among the 3 facilities, one will be at Prologis Park Chiba New Town and span 1.4 million square feet. It will be positioned alongside the National Highway No. 464 and offer good accessibility to the Narita International Airport.

The other facility will be at Prologis Park Yoshimi near the Ken-O Expressway and total 1.1 million square feet of space. The third facility will include 695,000 square feet of space at Prologis Park Narashino 5. Notably, Narashino serves as a distribution hub for e-commerce clients.

As a matter of fact, there is an increasing demand for Class-A facilities in Japan with rise in e-Commerce application and supply chain consolidation. Vacancy rates are low and amid a constrained supply of new facilities, net effective rents are growing. As such Prologis is capitalizing on this trend and securing land parcels. The company is leveraging on its development expertise and aiming at creating premium facilities in strategic locations in the country.

With around 22.9 million square feet of logistics and distribution space in Japan as of Mar 31, 2014, Prologis is one of the notable providers of industrial real estate in Asia. This depicts the company's decent foothold in the region's industrial real estate market. Last month, Prologis also came up with an earnings surprise of 2.38% for first-quarter 2014.

Prologis currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may also consider stocks like The GEO Group, Inc. ( GEO ), Rexford Industrial Realty, Inc. ( REXR ) and Terreno Realty Corp. ( TRNO ). All these stocks carry a Zacks Rank #1 (Strong Buy).

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