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Prologis’ 2022 guidance ahead of consensus as warehouse market tightens

Occupancy cracks 97%

Capacity coming online not enough to meet demand for logistics space (Photo: Jim Allen/FreightWaves)

Prologis Inc. reported fourth-quarter core funds from operations (FFO) of $1.12 per share, which was 2 cents ahead of the consensus estimate and 18% higher year-over-year. Occupancy tightened further, increasing 160 basis points to 97.4% from the year-ago quarter.

“Demand for our 1 billion-square-foot global portfolio shows no signs of slowing and we are positioned ideally to meet our customers’ most critical real estate needs,” said Hamid Moghadam, co-founder and CEO in a Wednesday press release. “In tandem, we remain focused on key customer-centric initiatives around energy, technology, labor, data and other aspects of our growing Essentials business.”

Click for full article – “Prologis: Logistics real estate vacancies will see all-time low in 2022”

Core FFO was $4.15 per share in 2021, a 9% increase year-over-year. The outlook for 2022 calls for a 22% increase in core FFO at the midpoint of the new range of $5 to $5.10 per share, which was well ahead of the $4.64 consensus estimate at the time of the print.

Table: Prologis’ key performance indicators

“While 2021 was a year of many records, most of the benefit from the current environment will be realized in the future,” said CFO Thomas Olinger. “Our high-quality growth profile is driven by our lease mark-to-market, profitable Strategic Capital business, development build-out potential and leverage capacity, all of which provide a clear, tangible runway for sector-leading growth for many years to come.”

At the close of the quarter, 98.2% of Prologis’ (NYSE: PLD) portfolio had been leased. Net effective rent change was 33%, 500 bps higher than the year-ago quarter.

“This was another good quarter for PLD with an even better outlook heading into 2022,” Kyle Sanders, senior equity research analyst at Edward Jones, told FreightWaves. “We think rent growth reflects continued e-commerce demand as well as rising inventory as clients reposition their supply chains for improving economic activity.”

Shares of PLD were up 2.7% in early trading Wednesday compared to the S&P 500, which was up 0.7%.

The company will host a call at noon Wednesday to discuss these results with analysts. Stay tuned to FreightWaves for continuing coverage of Prologis’ earnings report.

Prologis Ventures is an investor in FreightWaves.

Click for full article – “Prologis: Logistics real estate vacancies will see all-time low in 2022”

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.