Prologis to Expand in Brazil


As part of its efforts to expand its business in Brazil, Prologis Inc. (PLD) penned a Build-to-Suit deal with Brazil - WMB Comercio Eletronico LTDA, a unit of Wal-Mart Stores Inc.’s (WMT) global e-commerce organization. The deal is for a distribution center, which would span 576,000 square foot in Sao Paulo, Brazil.

To be constructed at Prologis CCP Cajamar II adjacent to the Anhanguera Highway, this new facility would benefit from its immediate access to the Rodoanel (Ring Road) and central Sao Paulo. Following the construction, Cajamar I and Cajamar II are projected to aggregate around 4.9 million square feet.

Notably, Prologis CCP is a joint venture between Prologis and Cyrela Commercial Properties (:CCP). This JV has developed Prologis CCP Cajamar II Industrial Park and operates it presently.

In Brazil, there is an increased demand for Class-A facilities owing to rapid growth in e-commerce. To better serve customers and reduce delivery time, firms are seeking a consolidation of distribution networks and settling in the vicinity of population centers.

Prologis stands to benefit from this move as it has the capacity to offer modern distribution facilities in strategic infill locations. Its joint venture, Prologis CCP is a leading provider of industrial real estate in Brazil.

According to a report by Cushman & Wakefield, in Brazil the real estate landscape is exhibiting promising prospects with the demand for industrial space reaching its peak on the Rio-Sao Paulo axis.

Prologis currently carries a Zacks Rank #3 (Hold). Other stocks worth considering include Sotherly Hotels Inc. (SOHO) and CubeSmart (CUBE). While Sotherly carries a Zacks Rank #1 (Strong Buy), CubeSmart has a Zacks Rank #2 (Buy).

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