Prologis Europe is gearing up to recapitalise part of its investment property portfolio. Under the plan, the company will seek to recapitalise the former Prologis European Properties (PEPR) portfolio which Prologis now fully owns. The EUR 2.8 bn portfolio includes 210 distribution facilities covering 4.5 million m[sup]2[/sup] across 11 European countries.

Prologis Europe is gearing up to recapitalise part of its investment property portfolio. Under the plan, the company will seek to recapitalise the former Prologis European Properties (PEPR) portfolio which Prologis now fully owns. The EUR 2.8 bn portfolio includes 210 distribution facilities covering 4.5 million m² across 11 European countries.

The move is in line with the New York-listed company’s longer term strategy to realign its portfolio with its investment strategy and to recycle capital into new development in its global markets. The PEPR portfolio will also enable Prologis Europe’s existing funds and ventures to increase their exposure to the logistics sector.

Philip Dunne, President Prologis Europe, confirmed that there is significant equity looking to get exposure to the logistics sector globally and that a more certain European macro environment would likely see some large capital flows into the sector over the next 12 to 18 months.

‘Given the lack of supply, and increasing demand for build-to-suit projects, I believe we will see speculative development moving back in the next three years to 40 or 50% of norm. With anaemic economic growth across Europe, the fundamental driver of demand for logistics facilities remains a structural one,’ he added. ‘The availability of modern supply in Europe is 4.5 times less than in the US whereas the population and economy of Europe are both larger.’

Dunne said that the occupancy rate of the PEPR portfolio is above the market average at 93.2%.

With a land bank in Europe valued at around EUR 580 mln, Prologis is considering new developments in the key countries of western Europe, in particular the UK, Germany and Poland. ‘We have strategic land positions for both build-to-suit and new speculative supply,’ Dunne pointed out. ‘Land in the right location is a real asset that can support demand into these tightening markets.’

The full interview appears in the November edition of PropertyEU. Click on the following link to subscribe: