AMB Property Corporation (AMB), a leading global owner, operator and developer of industrial real estate, has recently signed a 328,000 square foot leasing agreement in Hamburg, Germany. The company has leased the facility at AMB Hausbruch Industrial Center to BSN Medical GmbH, a leading global medical device company.
With the leasing agreement, BSN has gained a facility, which is next to its global R&D center and head office. Consequently, the deal ensures speedy and effective communication and increases operational synergy. Furthermore, the leased facility is strategically located in the close proximity of Altenwerder Terminals of the Port of Hamburg and approximately five miles from Hamburg city center. The facility also has ready access to the A7 highway that connects the city with the Rhine-Ruhr region, the most densely populated and industrialized region of the country.
The majority of AMB’s portfolio comprises high throughput distribution (HTD), which enables quick movement and distribution of goods to the customer. HTD properties are either warehouses or industrial properties that are located near airports, seaports, and ground transportation facilities, which enable rapid distribution of customers’ products. These HTD centers are typically located in areas, which are supply-constrained, in-fill markets, and are global ports. The location advantage also brings a significant pricing advantage.
Industry focused REITs have been one of the worst performing sectors in 2009. With a sagging global GDP, demand for industrial space continues to dry up. However, AMB is better equipped than its peers to weather the current downturn due to its strong portfolio.
The company has a concentration of assets in high-barrier gateway markets that hold up better in a recession. The company is also de-leveraging its balance sheet by repaying debt using proceeds from asset sales and issuance of shares. We reiterate our Hold rating of AMB.
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