Prologis, Inc. (PLD) – acquired a portfolio of 23 Class-A distribution centers in three European nations, namely the Czech Republic, Poland and Slovakia. The industrial real estate investment trust’s (REIT) purchase can be justified by its objective to meet growth needs on the European soil.
These properties, covering around 2.5 million square feet, were particularly purchased through Prologis European Properties Fund II (PEPF II). Acquired at a discount to the replacement cost, these properties offer solid scope for Prologis to enhance its top line.
Among the 23 properties, 17 are located in Prague and span 1.75 million square feet. Well positioned on D5 highway, near Prague International Airport and with strong connectivity to Germany, Prologis Park Prague-Rudna is expected to benefit from a rise in available workforce in the future. The rest of the properties include 4 in Warsaw covering 596,000 square feet and 2 in Bratislava totaling 124,900 square feet.
As a matter of fact, there is a rising demand for high-quality logistics facilities in Europe thanks to an increase in e-Commerce application and supply chain consolidation. Moreover, availability of free capital and prospects of better returns are driving the REITs to beef up their portfolio in this continent.
Prologis is effectively capitalizing on this and recently bought a portfolio of logistics facilities and development land, covering over 1.6 million square feet, in Spain through its joint venture, Prologis European Logistics Partners Sarl (PELP). (Read: Prologis' PELP Buys Spanish Assets to Expand in Europe).
As of Jun 30, 2014, Prologis already owned and managed around 154 million square feet of logistics and distribution space in Europe.
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), Extra Space Storage Inc. (EXR) and Gladstone Commercial Corp. (GOOD). All these stocks have a Zacks Rank #2 (Buy).
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