Prologis Inks Build-to-Suit Deal with Swedish Logistics Firm

Prologis, Inc. (PLD) revealed a build-to-suit deal with Sweden's logistics company Strålfors for a space of 280,000 square foot of space. This space would be used by Strålfors for e-commerce enterprise CDON Group as a distribution center.

Being positioned next to the E4 motorway in the south of Sweden, Prologis Park Ljungby DC 1 enjoys decent accessibility, particularly a direct link to major metropolitan areas of Sweden and Denmark. In fact, efficient distribution could be achieved throughout the Nordic region with the help of this center.

Compared to other European nations, e-commerce in Sweden is at an earlier development leg. With a growing number of Internet users, there is ample opportunity to expand. However, that needs high-quality facility for establishing efficient-distribution networks, which in turn, would help in saving operational costs.

Prologis has already started capitalizing on the increasing demand for high quality logistics space in the region. In Sweden, the company’s logistics and distribution space span around 3.8 million square feet as of Sep 30, 2014. That the company’s properties enjoy solid demand is quite evident from the fact that these properties in Sweden are 100% leased.

In fact, as demand for Class-A facilities have been on the rise in many parts of the world, this industrial real estate investment trust (“REIT”), with its solid capacity, is well leveraging this improving trend. Recently, the company declared the ground breaking of a 1 million square foot facility in Tracy, CA. The park, named Prologis International Park of Commerce, is slated to become Northern California's largest master-planned park at a full build-out capacity of 19 million square feet.

Prologis currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider better-ranked stocks like DCT Industrial Trust Inc. (DCT), Duke Realty Corp. (DRE) and EastGroup Properties Inc. (EGP). All these stocks sport a Zacks Rank #2 (Buy).

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