Company Will Build More Than 3 Million Square Feet at New Strategic Locations Over Next 18 Months
Qingdao, Hangzhou and Ningbo to Be Added as New China Markets
ProLogis (NYSE: PLD), a leading global provider of distribution facilities and services, announced today that it is undertaking a significant expansion of its industrial portfolio in China.
The company has signed agreements to build new distribution parks at a variety of strategic locations across the country, including the new markets of Qingdao, Hangzhou and Ningbo, all located along China's eastern coast.
Initial development at the parks will comprise over 3 million square feet of industrial space and represent an aggregate total investment of more than US$90 million. Delivery of the new facilities will be phased over the course of the next 18 months. At the end of the first quarter, ProLogis' operational platform in China totaled 4.1 million square feet (381,000 square meters) of industrial space, along with 2.5 million square feet (232,000 square meters) under development at previously announced park locations.
"We continue to see tremendous opportunity in China," said Jeff Schwartz, chief executive officer of ProLogis. "Economic expansion is occurring at extraordinary rates, with GPD growth at close to 10 percent last year and foreign direct investment exceeding $60 billion. Given the fundamental strength of the market environment, we believe the time is right to expand our China platform and broaden our market footprint."
Schwartz noted that ProLogis continues to explore additional markets in China, including a number of inland cities, and will make investments in new locations as warranted by market conditions. "Expanding our presence here will enable us to address the substantial growth in demand we're seeing for high-quality industrial facilities, and deliver long-term benefits for the company and its customers," Schwartz said.
The new parks will be built in the following locations:
* Beijing: ProLogis Park Tongzhou will be located in Beijing Tongzhou
Logistics Park, one of three areas in the city designated by the
Beijing government for logistics operations. Development at the park
will consist of two inventory buildings totaling 293,000 square feet
(27,200 square meters), scheduled for completion in the first half of
2007. ProLogis is already developing industrial parks near the Beijing
airport and in the nearby city of Tianjin.
* Qingdao: ProLogis Park Chengyang will be located adjacent to Qingdao
Liuting International Airport, an increasingly important destination
for air cargo in China. Phase I of development at the park will
consist of two buildings totaling 234,000 square feet (21,800 square
meters) and is scheduled for completion in the first half of 2007.
ProLogis has also signed land agreements for two additional park
facilities near the Qingdao seaport complex. The port, already China's
fourth largest in terms of container volume, is undergoing a major
expansion program scheduled for completion in 2008.
* Shanghai: ProLogis plans to develop three new parks in Shanghai. One
will be located at the Shanghai International Automobile City
industrial park northwest of downtown. Another will be in the Minhang
area in the central part of the city. The third will be in western
Shanghai in the city's Songjiang Industrial Zone. Together, initial
development at the parks will comprise more than 1.5 million square
feet (141,400 square meters) of industrial space.
* Hangzhou: ProLogis Park HEDA will be located in the Hangzhou Economic &
Technological Development Area (HEDA), which covers more than 100
square kilometers and is one of China's most successful industrial
parks. Hangzhou is the capital of Zhejiang Province and a center of
economic activity in the Yangtze River Delta. Phase I of development at
the park will consist of three inventory buildings totaling
538,000 square feet (50,000 square meters), scheduled for completion in
the second half of 2006.
* Ningbo: ProLogis recently signed a land reservation agreement for
approximately 30 acres near the Ningbo port complex, China's
fifth-largest port by container volume. Ningbo, located on the east
coast south of Shanghai, saw containerized port traffic grow by nearly
30 percent in 2005. The park would be able to accommodate approximately
500,000 square feet (46,000 square meters) of new industrial space at
full buildout.
* Guangzhou: ProLogis Park Sanshan will be located outside the city of
Guangzhou on China's south coast, adjacent to the Sanshan river port
complex. Phase I of development at the park will consist of two
buildings totaling 492,000 square feet (45,700 square meters) and is
scheduled for completion in the second half of 2006. ProLogis already
operates two other industrial parks in the Guangzhou metropolitan area.
ProLogis currently employs approximately 140 people in China and now has offices in 12 locations across the country. "We have been fortunate in building an organization that is world-class in both talent and experience," said Ming Mei, ProLogis managing director and head of Chinese operations. "The strength of our team here provides us with a high degree of visibility into market conditions at a local level, and enables us to move quickly to capitalize on opportunities as they arise."
ProLogis entered the Chinese market in 2004 and has since established a leading position as a provider of industrial distribution facilities. Major customers in China include adidas, L'Oreal, Menlo Worldwide, Nokia, NYK, Samsung, UPS and Yum! Brands.
About ProLogis
ProLogis is a leading provider of distribution facilities and services with 388.6 million square feet (36.1 million square meters) in 2,337 properties owned, managed and under development in 79 markets in North America, Europe and Asia as of March 31, 2006. We continue to expand the industry's first and largest global network of distribution facilities with the objective of building shareholder value. We expect to achieve this through the ProLogis Operating System(R) and our commitment to provide exceptional facilities and services to meet our customers' expansion and reconfiguration needs.
