Prologis (PLD) Announces Encouraging Build-to-Suit Activity
Zacks Investment Research | Jan 15, 2019 09:02PM ET
Prologis’ (NYSE:PLD) build-to-suit activity remained solid in the second half of 2018, with the company completing 17 of such projects. These projects included more than 4.4 million square feet of area and involved total expected investment (TEI) of around $400 million on a Prologis-share basis.
The projects, which are located within the United States as well as across the globe, are made for customers like Amazon (NASDAQ:AMZN) , XPO Logistics, Inc. (NYSE:XPO) , Stericycle (NASDAQ:SRCL) , among others.
Further, this industrial real estate investment trust (REIT) commenced 15 build-to-suit projects during the same period, comprising 6.9 million square feet of space and involving a TEI of approximately $525 million on a Prologis-share basis.
In fact, for full-year 2018, the company completed 35 build-to-suit projects covering 12.4 million square feet of space and TEI of approximately $1.0 billion on a Prologis-share basis. During the year, it also started 29 build-to-suit projects which have a TEI of nearly $975 million on a Prologis-share basis.
Notably, the company signed agreements for 80% of these starts with multi-site customers, while more than 95% are located in global markets.
This high number of build-to-suit development projects highlights the advantageous location of the company’s land bank, as well as demand from its multi-site customers, many of whom are focused on e-commerce. The sites are positioned near large population centers that are suited for serving as the last warehouse before goods are delivered to consumers.
In fact, the industrial real estate market has been experiencing solid growth amid rising Internet retailing and supply-chain consolidation, thereby pushing up demand for logistics infrastructure and efficient distribution networks. Services like same-day delivery are gaining traction, and as such, last-mile properties are witnessing a solid increase in asset values.
Per a Zacks Investment Research
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