ProLogis, the world’s largest industrial real estate investment trust, is entering Beijing, the capital city of the world’s fastest-growing large economy, China.
The Aurora company announced plans Wednesday to build nearly 1.1 million square feet of storage and distribution space in four buildings on 27 acres at Beijing Capital International Airport. The first building is scheduled for completion early next year.
ProLogis, which counts express shipper DHL and manufacturing giant Unilever among its customers, hasn’t lined up tenants for the space. The company doesn’t expect that task to be difficult, however, given that Beijing is a transportation hub for northern China and is the focus of massive infrastructure improvements in anticipation of the 2008 Olympic Games.
“This is one of the greatest strategic locations in the world for us,” ProLogis chief executive Jeffrey Schwartz said of the company’s first investment in the Chinese capital city. ProLogis has a stake in warehousing and distribution facilities potentially totaling 24.2 million square feet in five other Chinese metro regions.
ProLogis plans to invest $36 million in the new development. That would raise the company’s total investment in China to about $765 million, shy of its goal to own $1 billion in Chinese distribution assets in the next four years.
“You can’t argue with China’s economic growth; pick up just about any product sold in the United States today, and it was made there, not here,” said Carey Callaghan, a real estate investment trust senior analyst for Goldman Sachs. “It makes sense that China should become a bigger and bigger part of ProLogis’ business.”
Major deals in foreign countries aren’t made over the phone. ProLogis’ network of distribution facilities spans the globe and keeps Schwartz and other company executives on a plane for much of the year. They work in conjunction with locals hired to help the company navigate cultures, languages and government regulations.
Schwartz said 54 of 55 employees who help run the company’s Chinese operations were either born in mainland China or Taiwan.
Staff writer Christine Tatum can be reached at 303-820-1015 or ctatum@denverpost.com.
