Prologis, a leading developer, owner and manager of distribution facilities, plans to develop its way through its significant European land bank, provided market conditions are favourable, according to its European president and CEO Philip Dunne.
Prologis, a leading developer, owner and manager of distribution facilities, plans to develop its way through its significant European land bank, provided market conditions are favourable, according to its European president and CEO Philip Dunne.
The US-based company aims to re-balance its directly owned global portfolio over time, freeing up capital by selling down selected stabilised assets in the US and re-investing in Europe and Asia. While the US will continue to account for the bulk of the portfolio, it is targeting a spread of 50% in the US, 30% in Europe and 20% in Asia.
The company currently has some $1 bn invested in its land bank in Europe, Dunne said. The current value of the land is slightly lower, but he sees potential to develop the land for similar returns as prior to the market crisis even though the market has not yet recovered: ‘Land values have reduced but construction costs have also fallen by between 20-30%. As values in the markets improve, a modest return to development at returns that make sense to our investors is justifiable.’
Prologis owns land across Europe, but the biggest concentrations are in the UK, Poland and France, Dunne said. ‘We also have key strategic positions in Belgium, Germany, Netherlands, Sweden and Spain.’ Prologis has a global portfolio of properties in 18 countries in North America, Europe and Asia, comprising over $35 bn in assets and more than 44 million m2.
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