U.S. Markets open in 4 hrs 1 min

Prologis Pens Build-to-Suit Deal in Japan

Zacks Equity Research

Industrial real estate investment trust (:REIT) – Prologis Inc. (NYSE:PLD) penned a build-to-suit deal in Japan for a 440,000 square foot distribution center. The deal was etched with a national retailer – Tohoku CO-OP – for an undisclosed amount. The facility will come up at Prologis Park Tomiya 3.

Amid a larger customer base, rise in e-Commerce application and supply chain consolidation, there is an increasing demand for Class-A facilities and Prologis stands to benefit as it has the capacity to offer modern distribution facilities in strategic infill locations. This new facility of Prologis is expected to benefit owing to its proximity to the Tohoku expressway with easy access to Sendai's central business district.

Notably, the industrial property market in Japan that suffered a setback owing to the devastation and loss caused by the earthquake and tsunami in early 2012 is showing signs of improvement. Particularly, amid an increase in Internet shopping and lack of adequate supply, the demand for Class-A logistics development is expected to continue to rise in Japan and Prologis is leveraging on this.

With around 23 million square feet of logistics and distribution space in Japan as of Sep 30, 2013, Prologis is one of the top providers of industrial real estate in Asia. This depicts the company’s solid foothold in the region’s industrial real estate market.

Prologis currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may also consider stocks like Getty Realty Corp. (NYSE:GTY), National Health Investors Inc. (NYSE:NHI) and Pebblebrook Hotel Trust (NYSE:PEB). All these stocks carry a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on PLD
Read the Full Research Report on PEB
Read the Full Research Report on NHI
Read the Full Research Report on GTY

Zacks Investment Research