Prologis remains focused on global trade markets, following merger with AMB Properties

When global industrial real estate bellwethers ProLogis and AMB Property Corporation finalized their merger into a singular entity under the name Prologis in June 2011, it officially meshed roughly 600 million square feet of modern distribution facilities located in key gateway markets and logistics corridors in 22 countries.

In January 2011, when the merger was first announced, officials at the companies said the new entity will have assets owned and under management of roughly $46 billion and market capitalization or more than $24 billion. And they added that the combined portfolios of these companies represents roughly 600 million square feet of “modern distribution facilities located in key gateway markets and logistics corridors in 22 countries,” with both companies having major portfolios in North America, Western Europe, and Japan, while Prologis has a major presence in the United Kingdom and Central and Eastern Europe, and AMB having a major presence in China and Brazil.

Since the merger was made official roughly 16 months ago, the global industrial real estate giant has things moving in the right direction, according to Steve Callaway, senior vice president and head of global customer solutions for Prologis.

In an interview with LM at this week’s Council of Supply Chain Management Professionals Annual Conference in Atlanta, Callaway said that the new entity very much still has a global focus, with 80 percent of its total space allocated to global markets, which have major population bases, consumer bases, and ports and airports.

In the United States, he said these regions are comprised of places like the Bay area in Northern California, Los Angeles, Long Beach, and the Inland Empire in Southern California.

“Global trade and population/consumer base are the two things our investments are mostly around,” said Callaway. “There are a few more global markets, too, but that is what our focus is on. At our recent investor meeting, we said our goal is to develop about $2.5 billion in property annually; we are at about $1.5 billion this year.”

When asked what types of business- and logistics-related activity is driving expansion for Prologis, Callaway said he is seeing e-commerce-dedicated facilities on the rise.

During the downturn, he explained that many customers were using existing facilities such as their distribution networks and now they are seeing more requirements solely dedicated to e-commerce or fulfillment strategies whether it [be] retail or bricks and mortar or a pure play e-commerce company.

“We are seeing more focus on that type of strategy,” he said. “Things that remain constant are security and increased trailer parking in yard space to accommodate trailers, which remains an important theme in the design of buildings when building a functional distribution facility.”