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Prologis (PLD) to Acquire Ally's Stake in Brazil Assets

Industrial REIT – Prologis, Inc. PLD – recently signed a deal to acquire its partner’s stake in the Brazil portfolio, for $362 million. The move would enable the company gain full ownership of Prologis CCP, which is a joint venture between Prologis and Cyrela Commercial Properties. Subject to closing norms and related regulatory approvals, this transaction is likely to close in the second half of this year.

Notably, this joint venture in Brazil presently owns and operates around 8.8 million square feet of space. It is the leading provider of industrial real estate in the country’s primary markets. Upon closure of this transaction, Prologis CCP will be renamed to Prologis Brazil.

This acquisition will offer Prologis scope to leverage on growth opportunities in the Brazil market. Although the country’s economy has witnessed a rough patch earlier, things are anticipated to improve in the upcoming period. In fact, economic reforms and efforts to boost consumption levels are likely to open up opportunities for new business.

As a matter of fact, Prologis has earned its reputation for being the leading provider of logistics real estate around the globe. The company already enjoys ownership or had investments in properties and development projects estimated to total around 678 million square feet in 19 countries.

This industrial REIT also continues to display robust fundamentals and improving prospects. Its occupancy remained high in first-quarter 2017. In fact, demand for the company’s facilities was fueled by growth in the housing, construction and e-commerce businesses. Moreover, market conditions in Europe continue to improve. In addition, Prologis remains focused on bolstering its liquidity.

Further, this Zacks Rank #2 (Buy) stock has risen over 10.3% in the past three months compared with just 2.8% growth recorded by the Zacks categorized REIT and Equity Trust - Other industry.

Other Key Picks

Other top-ranked stocks in the real estate space include Liberty Property Trust LPT, PS Business Parks, Inc. PSB and Whitestone REIT WSR. All three stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Liberty Property Trust and PS Business Parks have long-term growth rates of 6% and 5%, respectively.

Whitestone REIT’s FFO per share estimates for 2017 have moved up 4.0% to $1.05, over the past 60 days.

Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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