Prologis Posts Impressive Q4 Earnings, Beating Expectations
Strong Performance Across the Board
Logistics real estate investment trust Prologis has reported an impressive fourth-quarter performance, exceeding expectations with core funds from operations (FFO) of $1.50 per share. This result surpasses the consensus estimate by 11 cents, thanks in part to the sale of a data center.
Occupancy Remains High Despite Industry Downturn
Average occupancy across Prologis’ portfolio stood at 95.6%, a mere 30 basis points lower than the previous quarter. While this represents a 150-basis-point decline year over year, it’s a testament to the company’s resilience in the face of industry headwinds.
Rent Change and Lease Activity
The net effective rent change over the entire lease term was 66.3%, a 150-basis-point decrease sequentially and 780 basis points lower year over year. Meanwhile, total leases commenced represented 46.5 million square feet of space, a 6% year-over-year increase.
CEO Optimistic About Market Inflection Point
According to Hamid Moghadam, Prologis co-founder and CEO, “Post-election leasing activity has been strong, and our ongoing conversations with customers support our expectation that the market is nearing an inflection point.” Moghadam also highlighted the company’s unique positioning to capitalize on favorable trends in its data center and energy businesses.
Full-Year Guidance and Development Starts
Prologis has provided full-year guidance for 2025, anticipating core FFO of $5.65 to $5.81, slightly below the consensus estimate of $5.79. The company expects average occupancy to range from 94.5% to 95.5%. Development starts are projected to reach $2.25 billion to $2.75 billion.
Earnings Call Scheduled
Prologis will host a call at noon EST on Tuesday to discuss its fourth-quarter results in more detail.
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