The world’s largest logistics warehouse operator said publicly on Friday what everyone has sensed and experienced for many months: There is no more space to be had, at least right now.
Prologis Inc. (NYSE:PLD) Chairman and CEO Hamid R. Moghadam said in the San Francisco-based third-quarter earnings report that “space in our markets is effectively sold out.” Given that Prologis operates 995 million square feet of logistics warehouse space in 19 countries, that represents a lot of markets.
The company’s third-quarter results were “underpinned by record increases in market rents and valuations, Moghadam said. Vacancy rates are at “unprecedented lows,” he added.
The company’s core funds from operations, the yardstick by which its financial performance is measured, came in at $1.04 per diluted share in the third quarter, up from 90 cents in the 2020 quarter. It beat analysts’ consensus estimates by a penny. Prologis raised its full-year core FFO guidance by 0.7% to a range of $4.06 to $4.08 a share.
Prologis maintained its outlook on average occupancy for the year at between 96.25% and 96.75%.
In a sign of very robust pricing momentum, Prologis in the third quarter posted a 27.9% “net effective rent” increase over the 2020 period. The term is defined as the change in rates on new and renewed leases commenced during a specific period compared with the previous rental rates for that same space. The measure excludes leases of less than one year.
Shares were up 1.7% in premarket trading Friday. Shares are up more than 30% from the same period in 2020. Prologis is an investor in FreightWaves.