TEXT-S&P FAQ examines growth trends for European logistics

Thu Sep 20, 2012 2:53pm IST

(The following statement was released by the rating agency)

Sept 20 - The rise in e-commerce, coupled with the drive among retailers for more efficient goods order fulfillment and turnaround, places greater emphasis on the efficiency of logistics operations, bolstering the requirement for modern, high-specification logistics space. Highlighting the trend toward the provision of such facilities, Standard & Poor's Ratings Services now rates two European real estate companies operating entirely in the logistics property sector--Goodman European Logistics Fund, FCP-FIS (GELF; BBB-/Stable/--) and Prologis European Properties Fund II FCP (PEPF II; BBB/Stable/--).

Following a number of enquiries from investors, we have published a Credit FAQ outlining the rationale behind our ratings on GELF and PEPF II, and our views on trends in the logistics property sector, titled "Why The European Logistics Property Sector Looks Set To Grow." In this Credit FAQ we address the following questions:

-- What are the main credit strengths and risks that drive the ratings on GELF and PEPF II?

-- What implications does the prevailing macroeconomic environment in Europe have for the logistics real estate sector, and in particular GELF and PEFP II?

-- How do key operating indicators differ between specialist logistics and the retail and office property sectors?

-- What does Standard & Poor's consider to be the most significant challenges facing the logistics property sector?

-- From where does Standard & Poor's believe future growth will come in the logistics property sector?

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