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Prologis (PLD) Completes 16 Build-to-Suit Projects in 1H

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Prologis Inc.'s (PLD - Free Report) build-to-suit activity has remained solid in the year so far, with the company completing 16 such development projects in the first half. These projects included over 6.2 million square feet of area and involved total expected investment (TEI) of around $475 million on a Prologis-share basis.

The projects, which are located within the United States as well as abroad, are made for customers like Amazon.com Inc. (AMZN - Free Report) , The Home Depot, Inc. (HD - Free Report) , Logista Italia, among others.

Further, this industrial real estate investment trust (REIT) commenced 14 build-to-suit development starts during the same period, comprising more than 4.7 million square feet of space and involving a TEI of approximately $450 million on a Prologis-share basis.

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. These sites are positioned in urban markets that are suited for serving as the last warehouse before goods are delivered to consumers.

Notably, the industrial real estate market has been experiencing solid growth, thanks to rising Internet retailing and supply-chain consolidation. This, in turn, is spurring 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 study by the commercial real estate services firm — CBRE Group Inc. (CBRE - Free Report) — availability fell for 31 straight quarters to 7.3% for the U.S. industrial market in first-quarter 2018. Moreover, with demand surpassing new supply, net asking rents inched up 1.9% in Q1 to $7.01 per square feet — denoting the highest level since 1989.

Amid this, Prologis is well poised to benefit from its capacity to offer modern distribution facilities at strategic locations. The company, which has a sound development expertise, completed 33 build-to-suit projects covering more than 12 million square feet of space in 2017.

Prologis currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company’s shares have appreciated 2.1% in the year-to-date period compared with its industry’s growth of 0.5%.



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