Ushering in good news for its Mexico platform, industrial real estate investment trust (REIT), Prologis Inc. (PLD) disclosed the penning of two development lease deals for a total space of 406,000 square feet at Prologis Park Tres Rios in Mexico City.
In particular, the first lease deal is for a space of 250,000 square feet inked with DHL Metropolitan Logistics – a subsidiary of postal and logistics provider DHL. The other deal is for 156,000 square feet of space signed with VF Outdoor México S.A. – a subsidiary of the apparel company V.F. Corporation (VFC).
The spaces leased are specifically at Tres Rios 9, which is the newest development at Prologis Park Tres Rios. Positioned at the leading distribution submarket of Mexico City, this park spans around 2.3 million square feet with expansion capability of up to 2.7 million square feet and enjoys direct access to the NAFTA highway and downtown Mexico City.
With a rise in consumption, the demand for Class-A facilities has increased in key markets in Mexico and Prologis stands to benefit since it has the capacity to offer modern distribution facilities in strategic locations.
In fact, the above mentioned leasing deal reflects the strong demand for the company’s superior facilities. The company already has 31 million square feet of logistics and distribution space as of Dec 31, 2013 in Mexico to cater to the growing need for such logistic requirements.
Late last month, Prologis reported core FFO (funds from operations) per share of 43 cents in fourth-quarter 2013, which was a penny ahead of both the Zacks Consensus Estimate and the year-ago quarter figure. Though total revenue declined from the year-ago quarter, it managed to beat the Zacks Consensus Estimate.
Investors interested in the REIT industry may also consider stocks like CubeSmart (CUBE) and PS Business Parks Inc. (PSB). Both these stocks carry a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.
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