ProLogis – the world's largest owner, manager and developer of distribution facilities – was back on the takeover trail yesterday, buying the industrial development business of Parkridge, which has a number of projects in the West Midlands.
The #298 million deal gives ProLogis a variety of key assets across Europe, including an industrial land bank in the UK comprising more than 800 acres which can support as much as 15 million sq ft of new development worth an estimated #1.15 billion on completion.
ProLogis also gets Astral, Parkridge's UK logistics development business, and Parkridge’s 50 per cent stake in a central European logistics development joint venture. Combined, these facilities will have an estimated value of more than #333 million.
In a separate transaction, Parkridge’s joint venture partner has also agreed to sell its 50 per cent interest in the central European joint venture to ProLogis for 345 million euros (#230 million), including 246 million euros (#164 million) of debt.
Jeffrey H Schwartz, ProLogis chief executive, said: "This transaction further extends our leadership position as the largest provider of distribution facilities in Europe.
"It enables us to expand our presence in existing and target markets through acquisition of one of our top competitors in European industrial development.
"Additionally, it strengthens our land bank in central Europe and the UK, while enhancing our team with some of the industry's top real estate professionals. We look forward to integrating the two organisations and to the long-term value the acquisition will create for our company."
Last November, ProLogis acquired a large portfolio of real estate assets in the UK through the takeover of Severn Trent Property.
It bought the business from Birmingham-based water company Severn Trent for #71.7 million in cash.
The portfolio included sites that will support more than 3.5 million sq ft of industrial development in the East and West Midlands, the UK's primary area for distribution and logistics.
Meanwhile, as part of yesterday's deal with Parkridge, which has warehouse estates in Birmingham, a mixed use scheme in Solihull, plus a residential development in Knowle, ProLogis has also acquired 25 per cent interest in Parkridge's non-industrial real estate operations.
These include two mixed-use development projects in the UK; a retail warehousing development business focused on markets in the UK, France and Spain; and a rapidly expanding retail development businesses in Central Europe.
John Cutts, chairman of Parkridge, said: "I am delighted that our excellent warehouse development and investment business is to be consolidated into ProLogis – which is a company that I consider to be the best in class.
"The remainder of the Parkridge business, including retail, retail warehousing, offices and leisure, will benefit greatly from the equity provided by the transaction, and we look forward to a period of strong growth across Europe."
Mr Cutts is to join ProLogis as vice-chairman of Europe while continuing to focus on his role as chairman and chief executive officer of Parkridge Retail. Mr Schwartz added: "Mixed-use and big-box retail are both complementary to our business, as we serve many of the same customers and will leverage our global development expertise.
"ProLogis already has extensive development experience with both property types in the UK and North America.
"This investment will allow us to participate in the continued growth of these sectors across a broader range of European markets.
"But this will be without the need to commit a significant amount of management's time. Through this investment, we will benefit from teaming up with a leading developer in Europe."