ProLogis (NYSE: PLD), a leading global provider of distribution facilities, announced today that it will develop a new, 554,000 ft² (51,500 m²) distribution facility in The Netherlands for Hi-Logistics, a wholly owned logistics subsidiary of LG Electronics. "Since October of 2008, we've taken some major steps to reduce the overall level of risk in our business," said Walter Rakowich, ProLogis chief executive officer. "A part of this process has been to redefine how we approach new development - focusing more on development management opportunities and build-to-suit transactions utilizing our land bank, and when possible, investing our capital alongside that of our partners and customers."
ProLogis will build the facility on a 20-acre (eight-hectare) parcel of land it currently owns in the city of Oosterhout, one of the main logistics hubs in The Netherlands. Upon completion of the facility, the project will be contributed to ProLogis European Property Fund II, thereby generating proceeds and reducing risk to the company.
"This transaction reinforces ProLogis' ability to utilize our attractive land bank and development expertise to meet our customers' needs, even in this challenging environment," said Philip Dunne, president for ProLogis in Europe. "Hi-Logistics is a well-respected logistics company and has established a sound international presence. We are happy to support this customer's evolving distribution needs in The Netherlands and to continue our ongoing relationship with LG Electronics."
Hi-Logistics will use the space to distribute LG products regionally throughout Northern Europe. While this is Hi-Logistics' first lease agreement with ProLogis, LG Electronics is one of ProLogis' largest customers and currently occupies a total of approximately 2.6 million ft² (243,300 m²) of distribution space with the company across the United States and Europe.
"Locating in Oosterhout will enable Hi-Logistics to take advantage of a popular logistics location in Northern Europe, with quick access to transportation via truck, train or barge terminal," said Jae Sun Lee, president of Hi-Logistics Europe. "ProLogis has been a strategic partner throughout the negotiation process with a deep understanding of our needs. We look forward to occupying the facility upon its completion."
Construction on the facility will commence in July 2009, and is expected to be completed in the spring of 2010. ProLogis has additional land at the site with the ability to support another 431,000 ft² (40,000 m²) of future distribution space.
With a 7.1-million ft² (660,800 m²) portfolio, ProLogis is one of the largest providers of distribution space in The Netherlands. Other customers in the region include DHL, UPS, Antalis and Geodis.