NEW YORK CITY-Executives at ProLogis, one of the largest international industrial-property owners, are looking to expand the Denver-based company's retail and mixed-use asset base, they said here at an investors meeting. By 2010, management forecasts that it will have between $600 million and $800 million in annual development starts in North America, Asia and Europe, up from its current $1.3 billion in holdings.
“Mixed use and retail represents a great opportunity for us,” says Ted Antenucci, ProLogis' president of global development. “There's pretty good upside in some of these deals. It made sense to grow the business.”
In North America, the company is targeting retail with large anchor stores as part of larger, multi-use developments near urban areas with infill opportunities, such as developments it has done on former bases and industrial plants. For example, in Austin, TX, it is redeveloping the former Robert Mueller Municipal Airport, where 220,000 sf of retail recently opened, and up to an additional 480,000 sf is planned.
The firm is also finding synergy with some of the domestic retail tenants in its distribution centers. Best Buy, Home Depot and Wal-Mart are among the chains that have worked with the company on both industrial and retail developments.
In Europe, ProLogis subsidiary Parkridge is developing malls in Poland, where it has interests in eight sites, with one development is completed and four are under construction. The firm is also looking to develop major-tenant anchored centers in the UK and Western Europe and plans to spend $426 million overall in Europe in the next three years.
In China, ProLogis has been building Wal-Mart distribution centers for years. At the retailer's suggestion, the company teamed up with Wal-Mart's store builder in that country, has completed 13 stores and has an additional 23 under development.
ProLogis has entered the retail sector of the industry through acquisitions. The firm entered the business when it bought Catellus, which had a sizable mixed-use portfolio, in 2005. It acquired its European operations in February when it bought a 25% stake in the mixed-use and retail division of England-based industrial developer Parkridge. Last year the company bought a 30% stake in Szitic, a China-based firm that constructs Wal-Mart stores in that country.
Besides its retail and mixed-use growth, ProLogis is expanding its staple, industrial holdings. The firm has just more than $30 billion in assets owned, managed or under construction around the globe and is looking to double that figure by 2010.
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