ProLogis expands in China

Filed in archive Market Overview on March 11, 2007

ProLogis, a manager, developer, and owner of distribution facilities, said on Monday it has secured land for five industrial parks in China in an effort to expand its presence in the country.

The five industrial parks will be located in Changsa, Chengdu, Chongqing, Namjing, and Wuhan. The parks can cumulatively accommodate more than 8.7 million square feet and will require a $246 million investment. ProLogis said in a press release that the first distribution centers will be built this year and next year.

"Over the past three years, ProLogis has built an industry-leading position in China by focusing on coastal markets where demand is strongly tied to import-export activity," said Jeff Schwartz, ProLogis chief executive officer, in a press release. "Our China team has been extremely effective in executing this strategy, and we now have park sites in coastal locations that can support approximately 50 million square feet of total development. Importantly, we're seeing strong demand for our acquired and newly developed warehouse buildings from both local enterprises and international companies with Chinese operations.

According to Logistics Management Magazine, this expansion is a natural evolution of ProLogis' overall strategy for China, noting that while the company continues to extend its presence in coastal markets, it also sees opportunity in the country's large inland cities, driven by exceptional GDP growth and increased domestic consumption.

"Our five new expansion cities have an aggregate population of more than 60 million people, and all are important regional distribution hubs for manufacturers, retailers and third-party logistics providers," said Schwartz.

The new ProLogis China-based park sites include:

Changsha: ProLogis has secured 41 acres, which can accommodate five buildings totaling 900,000 square feet. It is scheduled to be completed in the second half of 2008.

Chengdu: ProLogis has secured 77 acres, which can accommodate 1.5 million square feet. It is scheduled to be completed in the first half of 2008.

Chongqing: Prologis has secured 59 acres, which can accommodate up to 1.2 million square feet. Completion It is scheduled to be completed the first half of 2007.

Nanjing: ProLogis has secured 66 acres and reserved another 79 acres adjacent to the Nanjing Lukou International Airport in Nanjing, which can accommodate 3 million square feet. It is scheduled to be completed in the second half of 2007.

Wuhan: ProLogis has acquired a 70 percent interest in a joint venture that owns three existing warehouse facilities and has reserved 119 acres of undeveloped land in Wuhan, the capital of Hubei Province. The sitecan accommodate up to 2.1 million square feet (195,000 square meters) at full buildout.