(Read more on the industrial market.)
BIRMINGHAM, ENGLAND-On-line apparel retailer ASOS has signed a full-building industrial lease here in the Midlands region totaling 158,000 sf. The recently completed distribution center in suburban Hemel Hempstead is owned by ProLogis, the Denver-based REIT.
"We're pleased to be working with ASOS.com, one of the fastest growing retailers in the UK, and we look forward to serving as their distribution facilities provider," says Alan Curtis, the UK managing director for ProLogis, in announcing the agreement. ASOS will be consolidating several operations into the new property. The firm offers an extensive range of men's and women's clothing, accessories and beauty products.
Given the tenant's goal to service all of the UK market from its new location, ASOS officials were enthused by accessibility elements of the new ProLogis complex, Curtis says. The building is situated adjacent to the M1 Motorway, the UK's primary north-south corridor that connects to several other thoroughfares. An efficient design and flexible layout of the Hemel Hempstead property were considered other selling points for the tenants, adds Curtis, while the building also offers the latest in fire, safety and climate control systems.
The ASOS deal provides yet another example of how Internet forces are impacting commercial real estate, Curtis notes. Whereas the movement has siphoned away business from traditional brick-and-mortar stores, warehouse product has found a fresh source of demand. "This market segment presents substantial opportunities for industrial developers with high-quality facilities in the right locations," relays Curtis, citing a recent report that estimates Internet-based sales growth in the UK has increased by 370% in just the past four years. ProLogis now leases nearly 2.5 million sf of industrial space to such Internet-reliant retailers as Amazon.com, Screwfix, Superdrug and Tesco. Agreements with similar operators are in the offing, Curtis reports.
Going forward, ProLogis should be well-positioned to capture a substantial share of that growth, he adds, with the firm already rated as the largest provider of industrial distribution buildings in the UK. The REIT has 17.6 million sf of space there, with the lead position mimicking that held by ProLogis globally. Manufacturers, retailers, transportation companies and logistics providers are among the sectors served by the organization internationally, with the ProLogis platform reaching 105 markets throughout Asia, Europe and North America. The REIT's total commercial real estate footprint is 41.5 million sf, a portfolio which has a present value of $29.2 billion.
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