Backed by 21 institutional investors and a €3bn fund, ProLogis has expanded across Europe by developing a string of logistic warehouse schemes at distribution hubs
ProLogis is continuing its drive into the European logistics sector with a number of new distribution warehouse additions to its existing 2.2m m2 European portfolio.
The company, which has a global portfolio covering 20m m2, invests in Europe through its €3bn ProLogis European Properties fund. The fund, which was created five years ago, consists of 21 international institutional investors, providing a total of €1.5bn in equity. “Most of the investors are European, although we have one US investor and some from Asia,” says Robert Watson, president and chief operating officer of ProLogis Europe.
The fund was set up to finance the development of a pan-European logistics portfolio at key distribution hubs. It has helped ProLogis to expand in 11 countries, including Benelux, the Czech Republic, France, Germany, Hungary, Italy, Poland, Spain and the UK. “Potential markets we are looking at for future logistics development are Portugal and Scandinavia,” says Watson.
“Our aim is to serve 1,000 logistics users across Europe, the US and Japan and we already have leases with over 450 of those,” says Ranald Hahn, senior vice-president of ProLogis Southern Europe. “Over 350 have more than one lease with us and Deutsche Post has taken 18.”
In Spain, ProLogis recently bought a 25ha site at La Garena in Alcala de Henares, Madrid, from Arpegio, Madrid’s regional development agency, for €16.5m. “We hope to do more work with Arpegio in future,” says Hahn. The site will be developed into a 115,000m2 logistics warehouse complex. FPDSavills advised on the transaction.
ProLogis has already developed a logistics park at Sant Boi, just outside Barcelona, 11,000m2 of which has been let to Hamman and a further 32,500m2 to Schneider.
In Italy, three buildings have been let to distribution giant TNT, in Italy’s biggest ever prelet. Two warehouses were built at Somaglia near Milan last year and a third is under construction. “We are committed to developing on another 30ha site in front of this, with construction starting next year,” says Watson. “When we start in an area, we like to have two to three years to really build up a presence in that market.”
ProLogis is particularly active around Paris’s La Francilienne ringroad and in a number of locations further out. At Le Havre, Gefco, a subsidiary of Peugeot Citroen, has prelet 32,000m2, occupying 8,000m2 immediately with the rest to be occupied by the end of the year.
Germany’s recession has not deterred ProLogis from continuing to develop there. In fact, reduced costs to occupiers have made it even more viable. “The German market is in the early stages of change in a logistics sense,” says Watson. “The German recession acts in our favour because costs are low. However, the stock of logistics facilities tends to be outmoded and the move towards modern logistics methods, like we have in the US, is a difficult and slow process,” he adds. The company’s four main markets in Germany are Cologne, Frankfurt, Krefeld and Neustat.
There is still room for cost efficiency improvements in the European logistics market, according to Watson: “The total cost of logistics in the US is 10% to 10.5% of GDP, whereas in Europe this figure is closer to 13% or 14.5%. So there is a huge margin for improvement.”
ProLogis is showing no signs of slowing down its European expansion and is considering new markets to enter, when the time is right.
ProLogis
Capronilaan 25-27
1,119 Np Schiphol-Rijk
Tel 31 20 655 6666
Fax 31 20 655 6600
www.prologis.com
