Prologis Inks Build-to-Suit Deal in China - Analyst Blog
April 04 2013 - 6:20AM
Zacks
San Francisco-based industrial real estate investment trust
(REIT), Prologis Inc. (PLD), inked a build-to-suit
agreement with Chinese logistics provider, Deppon. The agreement is
for 2 facilities aggregating 452,000 square feet in southern
China.
The proximity of this distribution center, which will be built at
the Prologis Dongguan Shipai Logistics Center, to the Congguan
Expressway that is scheduled for completion by year-end, would
offer direct access to key cities like Guangzhou and Shenzhen.
Notably, there is an increased demand for such facilities in
Dongguan, aided by economic growth, considerable manufacturing base
as well as domestic consumption. Prologis stands to benefit as it
has the capacity to offer modern distribution facilities in
strategic infill locations.
The new facilities would function as regional distribution centers
for the East Pearl River Delta area. It would include an extended
truck court, which would assist express inbound and outbound
operations of Deppon.
As a matter of fact, Deppon has been Prologis’ client in the past
and this particular deal will extend Prologis' relationship with
Deppon to over 1 million square feet across 5 markets in China.
Prologis is significantly capitalizing on the growing opportunities
in 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. Also,
the company has been actively spreading itself worldwide through
joint ventures.
As of Dec 31, 2012, the company had about 36.6 million square feet
of distribution space in Asia alone. Moreover, as of that date, the
company owned or had investments in, on a consolidated basis or
through unconsolidated joint ventures, properties and development
projects projected to total around 554 million square feet in 21
countries. We believe such strategic moves will help augment the
company’s top line going forward and provide upside potential to
its stock price.
Prologis currently holds a Zacks Rank #3 (Hold). Other REITs that
are performing well and are worth a look include Ryman
Hospitality Properties Inc. (RHP), Omega
Healthcare Investors (OHI), both of which carry a Zacks
Rank #1 (Strong Buy) and Cousins Properties Inc.
(CUZ) that holds a Zacks Rank #2 (Buy).
COUSIN PROP INC (CUZ): Free Stock Analysis Report
OMEGA HLTHCARE (OHI): Free Stock Analysis Report
PROLOGIS INC (PLD): Free Stock Analysis Report
RYMAN HOSPITLTY (RHP): Free Stock Analysis Report
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