AMB Leases in Europe - Analyst Blog

AMB Property Corp. (AMB), a leading real estate investment trust (REIT), has recently leased approximately 139,900 square feet of its development portfolio in Europe amid signs of gradual recovery in the industrial market fundamentals.

About 110,600 square feet of space were leased to Drake & Farrell Logistics B.V., a leading logistics provider in the Netherlands. The lessee will occupy the space at AMB Bleiswijk Distribution Center, a newly developed multi-tenant warehouse facility near Rotterdam.

 

The leased facility is strategically located along a major logistics corridor of the Netherlands and is accessible through interstate highways, which connect Rotterdam and the Rhine-Ruhr region – the most densely populated and industrialized area of Germany. In addition, the leased property has all the state-of-the-art facilities and serves as a role model for industrial development in the region. 

AMB also leased 29,300 square feet of space in AMB Barajas Logistics Park in Madrid, Spain, to an unnamed European transport and logistics company. The facility is adjacent to the Barajas International Airport Cargo Area and provides easy access to Madrid’s main road network. Consequently, the leased site offers a huge growth potential to the lessee. 
 
AMB is a leading industrial real estate company with a strong portfolio of warehouses and distribution facilities in some of the busiest distribution markets of the globe. The company’s properties are located in supply-constrained infill markets in close proximity to airports, seaports, and ground transportation facilities, which enable swift distribution of customers’ products.

AMB operates as a vertically integrated company and enjoys large economies of scale. It possesses an extensive knowledge of domestic and international industrial real estate markets. By the end of the second quarter of 2010, the company had about 156.1 million square feet of operating and development facilities across the globe, out of which 14 million square feet were located in Europe.

 

 We maintain our Underperform recommendation on AMB with a Zacks #5 Rank, which translates to a short-term ‘Strong Sell’ recommendation. In the last 30 days, AMB’s fiscal 2010 earnings estimates have been lowered by 12 out of the 14 analysts covering the stock, while none revised it upward. In addition, fiscal 2011 earnings estimates were reduced by 11 out of the 15 analysts covering the stock, while none increased the same. This indicates a clear negative directional pressure on the fiscal earnings estimates.