AMB Amb Property Corp.

AMB Property Corp. (AMB), a real estate investment trust (REIT), has recently leased about 219,600 square feet of space in its build-to-suit property in Chengdu in western China, for an undisclosed amount. The lessee was Deppon Express Co., Ltd, one of the premier logistics companies of China.

Deppon will occupy the warehouse facility at AMB Chengdu Airport Logistics Center 1, which is located in close proximity to the Chengdu International Airport and the City Center. The distribution facility also offers easy access to key transportation networks in fast growing markets, such as Chengdu and the greater western China region, in an efficient and cost-saving manner. Consequently, the leased property renders unmatched potential to profitably expand its business across the region.   

Furthermore, with the present lease agreement, AMB has strengthened its strategic ties with one of its esteemed clients such as Deppon, who also leases its facilities in Jiaxing and Ningbo. Headquartered in Shanghai, Deppon offers the widest customized transport service network coverage in 500-plus cities and regions across China with more than 1,800 freight vehicles. The company is regarded as a leading integrated service-oriented logistics provider in China with a full range of products and services like precision GPS-enabled road express service, precision intercity freight service, precision road freight service, and precision air freight service.

AMB provides industrial distribution warehouse space in some of the busiest distribution markets of the world. The majority of the company’s portfolio comprises high throughput distribution (HTD), which provides multiple options for quick movement and the distribution of goods to the customer. HTD properties are warehouses or other 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 characterized by global ports in supply-constrained, in-fill markets, which enable the company to gain a significant pricing advantage.

AMB operates as a vertically integrated company and enjoys large economies of scale through an extensive knowledge of domestic and international industrial real estate markets. The company has two lines of businesses – real estate operations, which involve the long-term ownership and operations of industrial properties, and private capital, which provide portfolio management and reporting services to JV partners. AMB earns acquisition, development, and asset management fees in addition to priority distributions and promoted interest from the private capital business.

Currently, we have a ‘Neutral’ recommendation and a Zacks #3 Rank on AMB that translates into a short-term ‘Hold’ rating. We also have a ‘Neutral’ recommendation and a Zacks #2 Rank (short-term ‘Buy’) for Duke Realty Corp. (DRE), a competitor of AMB.

 
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