Prologis Transforms Illinois Warehouse into Advanced Data Center Facility

In a significant milestone for logistics real estate, Prologis, Inc. (NYSE: PLD) has announced the sale of a newly developed data center in Chicago to HMC Capital (ASX: HMC). This development reflects the company's strategic direction in adapting its warehouse spaces to meet the surging demand for digital infrastructure.

The transformation of the warehouse into a turnkey data center boasts a capacity of 32 megawatts (MW), showcasing Prologis’s innovative approach in leveraging its real assets. This facility is part of the U.S. Logistics Fund (USLF), which underscores Prologis's commitment to converting its logistics properties for more efficient use.

Dan Letter, President of Prologis, emphasized the company's vision for warehouse conversions, stating that such innovative adaptations are crucial for optimizing their existing portfolio. By harnessing the capabilities of their data center platform, Prologis can seize unparalleled growth opportunities while simultaneously delivering substantial returns to their investors.

Power procurement has been at the forefront of Prologis's strategies, with the company currently securing 1.6 gigawatts (GW) of power globally, and an additional 1.4 GW in the pipeline. The rapid expansion of their in-house data center team, which includes industry veterans Chris Curtis and Laramie Dorris, further solidifies their leadership in the data center development space. With construction ongoing on about 490 MW, Prologis is set to significantly influence the industry's landscape.

Chris Curtis, the global head of data centers for Prologis, highlighted the company's collaboration with top-tier hyperscalers and AI leaders to meet increasing data needs. Their unique position, leveraged through a vast portfolio of 5,600 warehouses and 12,400 acres of land, facilitates the identification of high-value conversion projects. Since 1999, Prologis has successfully completed 29 data center projects, demonstrating their experience and expertise in this sector.

The acquisition of the Illinois data center by HMC Capital marks a strategic addition to their newly established DigiCo Infrastructure REIT. CEO David Di Pilla expressed pride in securing this asset located in a top-tier market, noting its long-term contracted cash flows which align seamlessly with DigiCo's investment strategy targeting high-quality data centers.

Skybox Datacenters, a key partner in this venture, reinforces the significance of the project. CEO Rob Morris stated that the data center sector is undergoing rapid growth, driven by today’s continually evolving digital economy. Through effective development strategies and strong utility partnerships, Skybox and Prologis collaborated to create a premier facility in Illinois, aimed against the backdrop of rising data demands.

Looking ahead, Prologis plans to initiate around 20 additional data center projects over the next four years, estimating an investment of $7 to $8 billion. As the digital landscape expands, the demand for state-of-the-art data centers is expected to surge, positioning Prologis and its partners as leaders in catering to these emerging needs.

In conclusion, Prologis's innovative transformation of warehouses into data centers not only enhances its logistics offerings but also aligns with broader trends in the digital infrastructure landscape, cementing its status as a pioneering force in global real estate.