ProLogis (Denver), one of the world’s largest owners and developers of distribution facilities, will pay just over $1 billion for the industrial operations of English developer Parkridge (Birmingham, England), as it seeks to extend its presence in the U.K. and Eastern Europe.
Denver-based ProLogis will buy Parkridge's industrial development business for $581 million and the 50% interest of a Parkridge’s joint venture partner in central Europe for $449 million, giving ProLogis full control of that operation.
The transaction “enables us to expand our presence in existing and target markets through the acquisition of one of our top competitors in European industrial development,” said Jeff Schwartz, ProLogis CEO, in a company statement. The acquisition is ProLogis' biggest since it acquired Catellus Development Corp in 2005, said Melissa Marsden, the company's senior v.p. of investor relations. The deal will add about 35.5 million square feet to the 422 million square feet of real estate that ProLogis owns, manages or has under development worldwide.
As part of the transaction, ProLogis has also acquired a 25% interest in Parkridge's non-industrial real estate operations. Those operations include two mixed-use development projects in the U.K.; a retail warehousing development business focused on markets in the U.K., France and Spain; and a rapidly expanding retail development businesses in Central Europe.
The deal gives ProLogis control of an industrial land bank in the U.K. of 800 acres, capable of supporting 14 to 15 million sq. ft. of new warehousing and distribution centers, which ProLogis valued at $2.25 billion. The eastern European joint venture has potential development valued at more than $650 million.