Prologis — which recently posted a fourth-quarter profit of $61m [£37m] — has confirmed its second UK industrial development in as many weeks.
In January the San Francisco-based company announced it was adding an extra 262,500sq ft of logistics warehousing at Prologis Park in South London. The build-to-suit distribution facility has been designed around the needs of an existing road freight customer and will complement its existing operation at Prologis Park Midpoint in the West Midlands.
The second deal involves the freehold sale of land to UK Mail and the construction of a combined 231,000sq ft office and mail sorting facility at Prologis Park Ryton in the West Midlands. Part of the project will include a 36,330sq ft head office building.
The carrier’s new hub, with its automated sorting equipment, will allow the group to continue the expansion of its parcel operations. UK Mail plans to increase its package handling from its current 20 per cent level to around 80 per cent. Construction work is expected to start early this spring.
“Prologis Park Ryton was selected following an extensive search of real estate in the West Midlands area,” said Guy Buswell, chief executive officer at UK Mail. “We have worked closely with Prologis to design a state-of-the-art facility that will support our business growth and help us maintain our position as the leading parcel carrier in the UK.”
A key attraction of the Ryton site is its location, surrounded by major motorways. Network Rail, the Dutch-owned Hi Logistics and Freeman have all recently moved to the Prologis Park. Work has also started on site of a 225,000sq ft speculative warehouse unit.
Andrew Griffiths is managing director of Prologis UK. “Both these agreements reflect the limited supply of high-quality logistics facilities in the UK market,” he said. “Our land bank and development expertise further enable us to support our customers’ expansion requirements and meet their immediate needs in key European markets.”
The imbalance between existing logistics facilities and those in the construction supply chain looks set to worsen over the next few years making Prologis, with its well-positioned land bank, one of the key players both in the UK and Europe. With around 145m square feet of logistics and distribution space under its ownership or management it is already a major European player.
Despite its return to a $61m fourth-quarter profit — compared with a year-earlier loss of $218.4m [£133m] — things have not been going all Prologis’s way. Turnover fell 14 per cent to $436m [£267] with rental income dropping by 19 per cent to $379m [£232m]. During the year it also disposed of almost $1.8bn [£1.1bn] worth of “non-strategic” sites and buildings around the world.
