Logistics real estate investment trust Prologis beat analysts’ expectations for the second quarter and modestly raised its full-year 2025 outlook on Wednesday. Average occupancy stabilized in the quarter and the company said customers are now ready to sign new leases.
“Our leasing pipeline has reached historically high levels, and what we’re hearing from customers, especially the larger ones, is clear: they’re planning, engaging and increasingly ready to act,” said Prologis President Dan Letter in a news release. “These trends are evident in both our leasing and build-to-suit activity—and we’re in a strong position to meet that demand.”
Prologis (NYSE: PLD) reported second-quarter core funds from operations (FFO) of $1.46 per share before the market opened, which was 4 cents above consensus and 12 cents higher year over year.
Total revenue was up 9% y/y to $2.18 billion as new leases commenced increased 10% to 51.2 million square feet. Average occupancy slid 120 basis points y/y to 94.9%, but was flat with the first quarter. (Occupancy was 95.1% to close the second quarter.)
Click for full report – “Prologis says warehouse ‘demand is piling up’”
The company raised the low end of its full-year FFO guidance by 10 cents but trimmed a penny off the high end. The new range is $5.80 to $5.85 per share.
The outlook assumes average occupancy in a range of 94.75% to 95.25% and development starts between $2.25 billion and $2.75 billion (a 43% increase from the first quarter at the midpoint of the range). The new outlook for development starts is back in line with the company’s initial guidance for the year, which was issued in January.
Click for full report – “Prologis says warehouse ‘demand is piling up’”
“The increase in our guidance reflects our confidence in the strength and resilience of our business,” said CFO Tim Arndt. “Our teams are executing at a high level, and we’re well-positioned for the remainder of the year.”
Prologis will host a call at noon EDT on Wednesday to discuss second-quarter results.
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