Consolidation in the European warehousing market is continuing. ProLogis, the world's largest owner and developer of logistics facilities, has announced that it has acquired the industrial development business of Parkridge, a leading European rival. The total paid for Parkridge was approximately £298 million pounds ($581 million) in cash and shares.

The transaction gives ProLogis ownership of a variety of assets across Europe, including an industrial land bank in the United Kingdom that can support 14 to 15 million square feet of new development, with estimated value at completion in excess of $2.25 billion. It also includes Astral, Parkridge's UK logistics development business, which has 10 industrial projects under construction, totaling approximately 5.2 million square feet. Parkridge had recently launched operations in Western Europe focused on new industrial development in Belgium, France, Germany, Italy, Luxembourg, The Netherlands and Spain.

In addition to this, the deal includes Parkridge's 50 percent interest in a Central European logistics development joint venture. Separately it also acquired the holding of the joint venture partner giving it sole ownership of a further 5.6 million square feet of existing warehouse facilities.

The acquisition of Parkridge by ProLogis is part of a trend towards consolidation in the market, with major warehouse facility providers scaling up to meet the regional/global distribution needs of manufacturers, retailers and logistics providers. In 2005 ProLogis acquired US Catellus Development Corporation for approximately $4.9 billion. Last year (2006), Macquarie Goodman Group acquired Eurinpro, a leading European provider of distribution facilities and previous to that UK-based Arlington Securities. At present the market remains strong, with rents rising and an on-going demand for modern distribution facilities. There is little sign that this will change soon.