ProLogis acquires industrial business of European developer Parkridge (US/EUR)

ProLogis (NYSE: PLD) has announced that it has acquired the industrial development business of Parkridge, a leading European developer of distribution centers. The total consideration for Parkridge is approximately €298 million ($581 million) in cash and ProLogis common shares.

John Cutts,Chairman of Parkridge Holdings, (left) and Jeffrey H Schwartz , CEO ProLogis (right).

The transaction combines two of the most experienced teams of European industrial real estate professionals and gives ProLogis ownership of a variety of high-quality assets across Europe, including:

  • An industrial land bank in the United Kingdom comprising more than 800 acres that can support 14 to 15 million square feet of new development, with estimated value at completion in excess of $2.25 billion;
  • Astral, Parkridge's UK logistics development business, which has 10 industrial projects under construction, totaling approximately 5.2 million square feet;

    • Recently launched operations in Western Europe focused on new industrial development in Belgium, France, Germany, Italy, Luxembourg, The Netherlands and Spain;
    • Parkridge's 50 percent interest in a Central European logistics development joint venture that controls land positions supporting over 5.2 million square feet of industrial space and has an additional 4.5 million square feet under construction. Combined, these facilities will have an estimated value of more than $650 million at full build out. The venture also owns 5.6 million square feet of existing warehouse facilities.

    In a separate transaction, Parkridge's JV partner has agreed to sell its 50 percent interest in the Central European joint venture to ProLogis for €345 million ($449 million), including €246 million ($320 million) of debt to be paid down at closing.

    The existing industrial properties, as well as those that are developed on land positions acquired in the transaction, are expected to be contributed by ProLogis to a ProLogis property fund.

    "This transaction further extends our leadership position as the largest provider of distribution facilities in Europe," said Jeffrey H. Schwartz, ProLogis chief executive officer. "It enables us to expand our presence in existing and target markets through acquisition of one of our top competitors in European industrial development. Additionally, it strengthens our land bank in Central Europe and the UK, while enhancing our team with some of the industry's top real estate professionals. We look forward to integrating the two organizations and to the long-term value the acquisition will create for our company."

    As part of the transaction, ProLogis has also acquired a 25 percent interest in Parkridge's non-industrial real estate operations. Those operations include two mixed-use development projects in the UK; a retail warehousing development business focused on markets in the UK, France and Spain; and a rapidly expanding retail development businesses in Central Europe.

    "I am delighted that our excellent warehouse development and investment business is to be consolidated into ProLogis – a company that I consider to be best in class," said John Cutts, chairman of Parkridge. "The remainder of the Parkridge business, including retail, retail warehousing, offices and leisure, will benefit greatly from the equity provided by the transaction, and we look forward to a period of strong growth across Europe."

    Cutts will join ProLogis as vice chairman of Europe while continuing to focus on his role as chairman and chief executive officer of Parkridge Retail. "John's track record of success in the UK and Central European real estate markets speaks for itself," Schwartz said. "The leadership, experience and industry-wide relationships he brings to ProLogis will be of enormous value as we continue building our business. In addition, John will serve as a valuable source of counsel and strategic assistance to Gary Anderson, ProLogis' Europe president and chief operating officer.

    "Mixed-use and big-box retail ar

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