Prologis Park Budapest/Sziget
Prologis announced that its European operations produced 615,000 sqm in leasing activity, including a 17,500 sqm new lease in Prologis Park Pilsen-Stenovice to an existing 18,000 sqm client, a 20,400 square meter build-to-suit expansion at Prologis Park Hunxe in Germany, and a 20,500 sqmlease extension with UTi Hungary Logistics LLC at Prologis Park Budapest/Sziget.
Worldwide, the company leased 3.3 million sqm of space and beat expectations by finishing June with a 92.4% occupancy rate (details here). Same-store net operating income rose 0.4% over the same period in 2011.
The deal between AMB Property Corporation and ProLogis is done. The company will trade under the name Prologis under which former ProLogis common equity holder will have about 60 percent of the combined stock of the two companies.
In the press release, the companies write:
The transaction will create synergies and be immediately accretive, with the full expected annual gross savings of approximately $80 million in G&A to be realized by the end of 2012. The company anticipates it will have an improved cost of capital with greater financial flexibility and that its expanded footprint will generate increased revenue opportunities by allowing it to better serve the needs of its customers.
ProLogis has announced officially what its representatives have been hinting at for a couple of weeks now, which is that its Slovak portfolio is now officially full. As in, no vacancy. “Now we are moving our focus to securing pre-let and build-to-suit opportunities in Slovakia to monetize our 48 ha land bank available for the immediate development,” says Martin Polak, market officer in the Czech Republic and Slovakia.
ProLogis has upped the stakes on the proposed takeover of PEPR by Goodman by making its own bid, which would value the fund at €1.7bn. News of a rejected offer from Goodman and the Dutch pension fund APG sent PEPR shares up 9.2% yesterday.
Goodman is apparently in a buying mood these days. Last month it announced its acquisition of the ING Industrial Fund. Now it’s revealed the real size of its appetite after announcing that its bid to purchase ProLogis European Properties, in tandem with Algemene Pensioen Groep, was rejected. Another proposal could be made within the next two months.
Is ProLogis interested? Not by the sounds of it: Walter C. Rakowich, ProLogis CEO said, “ProLogis has no intent or desire to sell its interest in PEPR. Additionally we have no intention of selling or relinquishing the management of PEPR. The value proposition of PEPR has always been inextricably linked to ProLogis’ active ownership and management.
Times were that warehouse construction starts were no big thing, but we live in a new time. One in which oversupply of space was a serious problem until recently, and tougher financing and leasing terms meant that new build space was a rarity. So the fact that ProLogis is building in Jirny (Czech Republic) and in Wroclaw, where projects of 20,000 sqm and 22,350 sqm are to be completed by the fourth quarter of the year is significant news.
“ProLogis’ absolute advantage, apart from having distribution facilities available for immediatelease and use, is an extensive land bank of strategically located sites across the CEE region, which gives us the opportunity to meet our customers’ needs for new distribution space,” said Ben Bannatyne, ProLogis managing director for Central & Eastern Europe.
Hopi Hungary has signed a lease agreement for 20,500 sqm of warehouse space ProLogis Harbor Park, extending its lease from Building L to Building J as well. Hopi was using Building L to provide services for Unilver ath the park which sits adjacent to the M6 motorway to the south of Budapest. The situation on industrial sector has been looking up as late, with the pace of leasing deals rising considerably.
Cushman & Wakefield reported that take-up improved in 2010 to 2.5m sqm, compared to just 1.8m sqm in 2009. On the other hand, the agency points out that output fell by over 1m sqm to just 580,000 sqm.