U.S. Markets closed

Prologis Develops Logistics to Solidify Biz in Europe

Zacks Equity Research

After a series of Mexican expeditions, Prologis Inc. (PLD) is now focusing on strengthening its foothold in Europe. This San Francisco-based industrial real estate investment trust (:REIT) has disclosed the development of 2 logistics properties in Central & Eastern Europe.

In particular, Prologis is constructing 1 facility each in Slovakia and the Czech Republic. The facility in Slovakia will span 255,000 square foot and will be located at Prologis Park Bratislava. On the other hand, the Czech Republic-based property will be placed at Prologis Park Prague Airport and will stretch 323,000 square foot. Both facilities are expected to be completed in the fourth quarter.

The to-be-developed assets, which are located in key distribution regions, are expected to serve supply chain demand of the areas. With a low construction activity, especially in the Czech Republic region, the move would help Prologis to capitalize on the growing opportunities in the logistics and manufacturing facilities in Europe. Notably, as of Mar 31, 2014, the company had around 152 million square feet of logistics and distribution space in Europe.

Prologis specializes in industrial distribution warehouse space in some of the busiest distribution markets across the globe. As a matter of fact, amid a larger customer base, rise in e-Commerce application and supply chain consolidation, there is an increasing demand for high-quality logistics facilities.

This leading industrial real estate investment trust (:REIT) stands to benefit as it has the capacity to offer modern distribution facilities in strategic infill locations globally. Consequently, earlier this month, Prologis completed the initial public offering and listing of its Mexican REIT – FIBRA Prologis (BMV: FIBRAPL 14) to boost its presence in the region (read: Prologis Sets Up Mexican REIT, Shares Gain). We expect such strategic moves to enhance its overall profitability.

Prologis currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like The GEO Group, Inc. (GEO), Terreno Realty Corp. (TRNO) and Chatham Lodging Trust (CLDT). All these stocks sport a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on PLD
Read the Full Research Report on TRNO
Read the Full Research Report on CLDT
Read the Full Research Report on GEO

Zacks Investment Research