Prologis Q4 2024: Record Leasing Activity Amid Market Recovery and Strategic Growth Initiatives
Earnings DecryptWednesday, Jan 22, 2025 6:53 am ET
1min readLeasing Performance and Market Conditions:
- Prologis reported signing more than 60 million square feet of leases in Q4, marking a company record.
- The company observed a notable improvement in leasing activity post-U.S. election, with a 17% increase in pipeline from January to January.
- The acceleration in leasing was attributed to reduced uncertainty in decision-making among tenants due to geopolitical concerns and cost of capital.
Occupancy and Vacancy Trends:
- Prologis maintained an average occupancy of 95.8% for the quarter, with a full-year occupancy of 96.3%.
- The company anticipates occupancy to fluctuate between 94.5% and 95.5% in 2025, with a rebuild expected towards the end of the year.
- These trends are influenced by the bottoming process of markets and the recovery in net absorption expected throughout the year.
Financial Performance and Guidance:
- The company achieved Core FFO of $1.42 per share, excluding net promote income, and $1.50 per share including it.
- 2025 guidance includes average occupancy ranging between 94.5% and 95.5%, and net effective same-store growth forecasted in a range of 3.5% to 4.5%.
- Financial guidance reflects market conditions and expectations for improved customer engagement and decision-making.
Capital Recycling and Strategic Initiatives:
- Prologis recycled over $3.3 billion of assets in 2024, including a $2 billion contribution to strategic capital ventures.
- The company raised over $1.7 billion across various platforms, driving third-party AUM growth by over 7%.
- These initiatives demonstrate Prologis' ability to self-fund and earn returns regardless of yield environment, highlighting strategic alignment with market conditions.
- Prologis reported signing more than 60 million square feet of leases in Q4, marking a company record.
- The company observed a notable improvement in leasing activity post-U.S. election, with a 17% increase in pipeline from January to January.
- The acceleration in leasing was attributed to reduced uncertainty in decision-making among tenants due to geopolitical concerns and cost of capital.
Occupancy and Vacancy Trends:
- Prologis maintained an average occupancy of 95.8% for the quarter, with a full-year occupancy of 96.3%.
- The company anticipates occupancy to fluctuate between 94.5% and 95.5% in 2025, with a rebuild expected towards the end of the year.
- These trends are influenced by the bottoming process of markets and the recovery in net absorption expected throughout the year.
Financial Performance and Guidance:
- The company achieved Core FFO of $1.42 per share, excluding net promote income, and $1.50 per share including it.
- 2025 guidance includes average occupancy ranging between 94.5% and 95.5%, and net effective same-store growth forecasted in a range of 3.5% to 4.5%.
- Financial guidance reflects market conditions and expectations for improved customer engagement and decision-making.
Capital Recycling and Strategic Initiatives:
- Prologis recycled over $3.3 billion of assets in 2024, including a $2 billion contribution to strategic capital ventures.
- The company raised over $1.7 billion across various platforms, driving third-party AUM growth by over 7%.
- These initiatives demonstrate Prologis' ability to self-fund and earn returns regardless of yield environment, highlighting strategic alignment with market conditions.
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