Another deal is in the offing for Prologis Inc. (PLD). This time it is a build-to-suit agreement for 269,100 square foot of space in the Netherlands, inked with Coolblue, an online retailer in the Benelux.
This facility would come up in a master-planned industrial park, Prologis Park Tilburg, spanning 1.9 million square foot of space. With this deal, the park achieved 100% leasing, this reflects the solid demand for the company’s properties. Further, the park has a build-out potential for another 807,300 square feet.
Coolblue, which has witnessed a significant surge in revenues over the past quarters, is increasingly seeking to satisfy customer demand by making delivery of purchases on the same day. As this park is suitably positioned in the key logistics hub in Tilburg, it can well serve as a regional distribution center and help the company reduce its delivery time.
Notably, amid a larger customer base, boom in e-Commerce application and supply-chain consolidation, there is a growing demand for logistics infrastructure and efficient distribution networks. Companies prefer to settle in well-connected areas from where they can efficiently distribute purchases in a minimum time.
Prologis, with its solid capacity, is aiming to leverage this favorable trend. Most recently, the company came up with the announcement of a pre-leasing agreement for a space of 207,000 square feet in a Toronto development. Apart from this, in September, Prologis inked 2 build-to-suit deals in Europe for a total space of 594,000 square feet.
We believe that these deals would help Prologis gain a solid traction in the European market and help it ride on the growth trajectory. The company already holds around 16 million square feet of logistics and distribution space (as of Jun 30, 2014) in the Benelux.
Prologis currently carries a Zacks Rank #2 (Buy). Investors interested in the REIT industry may also consider other stocks like Mack-Cali Realty Corp. (CLI), Cousins Properties Incorporated (CUZ) and Duke Realty Corporation (DRE). All these stocks hold the same rank as Prologis.
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