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Americold Expands in New Zealand, Partners With Countdown

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Americold Realty Trust (COLD - Free Report) is progressing with its infrastructure network expansion in New Zealand. Initially announced during the company’s fourth-quarter 2019 earnings conference call, it plans investment of roughly $65 million NZD for expansion of its Dalgety site in Auckland. The development is expected to be completed by mid-2021.

The expansion, which will be anchored by Woolworths New Zealand (Countdown supermarkets), will increase 4.6 million cubic feet of temperature-controlled capacity to existing facility.The move will also add around 27,000 pallet positions, and the facility will have 20 additional dock doors and semi-automated container unloading technology upon completion.

The expansion efforts of Americold are aimed at banking on the expected growth of the national retailers, food producers, processors, distributors, and quick-service restaurants in New Zealand.

Americold’s strategically-located high-quality facilities serve as an indispensable component of food infrastructure from “farm to fork", connecting food producers, processors, distributors and retailers to consumers. The company is likely keep gaining from decent demand for these properties. Particularly, steady population growth and consumption increase, together with transition in consumer preferences toward healthy, perishable food, are likely to result in healthy demand for temperature-controlled infrastructure.

Moreover, retail customers are navigating through the evolving competitive landscape by improving and integrating their e-commerce offerings. The e-commerce boom is creating opportunities for Americold.

Amid the e-commerce boom and supply-chain strategy transformations, demand for the overall industrial real estate has been strong. In light of the coronavirus pandemic, warehouse operations have become all the more essential with increased e-commerce customers. Over the long term, apart from the fast adoption of e-commerce, the logistics real estate is expected to benefit from the likely increase in inventory levels post crisis.

This will open up prospects for other industrial REITs too like Duke Realty Corp. , Prologis (PLD - Free Report) and Rexford Industrial Realty, Inc. (REXR - Free Report) . However, the pandemic’s adverse impact on the economy will likely thwart demand for space in the near term. Rent relief and deferrals are added concerns.

Americold currently carries a Zacks Rank #3 (Hold). Shares of the company have rallied 3.3% so far in the year, as against the 4.8% decline of its industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



 

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