ProLogis Releases New Research Report on Japan's Industrial Property Market

- Modern Distribution Space Constitutes Less Than One Percent of Total Warehouse Supply -

DENVER, March 28 /PRNewswire-FirstCall/ -- ProLogis (NYSE: PLD), the world's largest owner, manager and developer of distribution facilities, today released a new research report on the state of the logistics property markets in Japan.

The report, entitled "Japan's Logistics Property Markets -- Drive to Efficiency," explores the transformation of Japanese industrial real estate over the past six years. Prior to 2000, the majority of companies owned distribution facilities in-house, due to deep-seated business practices and cultural preferences. Today, spurred by economic progress, regulatory changes and intensifying global competition, occupiers are far more receptive to outsourcing both their real estate and their supply-chain operations.

"Japan's logistics property markets are in the throes of a sweeping structural transformation," said Leonard Sahling, first vice president of research for ProLogis. "Japanese companies have begun to recognize and relish the greater flexibility, efficiency and nimbleness that comes from leasing rather than owning distribution facilities."

The report is based on both primary and secondary quantitative research as well as qualitative interviews with members of Japan's development, government and brokerage sectors. It includes detailed information and analysis in the following areas:

      *  Lack of supply: Japan's total inventory of warehouse/distribution
         space encompasses about 5 billion square feet of floorspace.  The
         vast majority, however, is old and ill-suited for use in modern
         distribution networks.  In the for-lease market, only about 30
         million square feet -- less than 1 percent of total inventory -- is
         suitable for use in best-in-class supply chains.

      *  Occupier demand: The traditional Japanese preference for real estate
         ownership is eroding in the face of heightened global competition and
         more stringent customer service requirements.  Japanese companies
         have come to realize that robust logistics networks are a key
         determinant of success on the economic battlefield, and that
         outsourcing is often the best way to achieve that objective.
         Logistics costs as a percentage of GDP have fallen significantly
         since the early 1990s, from 10.5 percent in 1991 to 8.2 percent in

      *  Construction trends: Japan has seen an increase in the building of
         new, large-scale industrial facilities.  New starts of warehouses
         over 100,000 square feet rose to 35.5 million square feet in fiscal
         2005 -- well above the previous year's pace.

      *  Fixed-term lease contracts: Japan overhauled its lease laws in 2002
         in a way that eliminated strong biases that formerly had favored
         tenants.  New so-called "fixed-term lease contracts" have evened the
         playing field for industrial landlords.  For instance, occupiers used
         to be able to terminate lease contracts prematurely as long as they
         gave six months' written notice.  With the new lease contracts, they
         are legally obligated for the full term of the agreement.

"Japanese enterprises are just as eager to create best-in-class distribution networks as companies elsewhere in the world," said Sahling. "The cultural and structural changes that have occurred in Japan in recent years have set the stage for huge improvements in this regard, creating long-term opportunity for real estate investors at the same time."

For a copy of the new reports or past reports, visit the "Proprietary Research" page in the Investor Relations section of the ProLogis web site, at

About ProLogis

ProLogis is the world's largest owner, manager and developer of distribution facilities, with operations in 80 markets across North America, Europe and Asia. The company has $26.7 billion of assets owned, managed and under development, comprising 422 million square feet (39.2 million square meters) in 2,466 properties as of December 31, 2006. ProLogis' customers include manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises with large-scale distribution needs. Headquartered in Denver, Colorado, ProLogis employs more than 1,250 people worldwide.