Prologis Reports Strong Q4 Results, Driven by Strategic Acquisitions and Healthy Leasing Activity

Prologis, Inc. (NYSE: PLD), the global leader in logistics real estate, reported its fourth-quarter and full-year 2024 results on Jan. 21, 2025, before the opening bell. The company's strong performance was driven by strategic acquisitions, healthy leasing activity, and growth in same-store net operating income (NOI). Here's a breakdown of the key highlights and what they mean for investors.



Fourth Quarter Results:

* Net earnings per diluted share: $1.37, up 101.5% year-over-year (YoY)
* Core funds from operations (Core FFO) per diluted share: $1.50, up 19.0% YoY
* Core FFO, excluding Net Promote Income (Expense) per diluted share: $1.42, up 10.1% YoY
* Average occupancy: 95.6%, down 10 bps from the prior quarter
* Leases commenced: 46.5 MSF, with a retention rate of 78.4%
* Same-store NOI: $1.3 billion, up 7.2% YoY
* Interest expenses: Up 25.1% YoY in the fourth quarter



Full Year Results:

* Net earnings per diluted share: $4.01, up 21.9% YoY
* Core FFO per diluted share: $5.56, down 0.9% YoY
* Core FFO, excluding Net Promote Income (Expense) per diluted share: $5.53, up 8.4% YoY
* Average occupancy: 96.2%, up 30 bps from the market average
* Cash same-store NOI (Prologis share): 6.7% YoY
* Net effective rent change: 66.3% YoY
* Cash rent change: 40.1% YoY

Key Takeaways:

1. Strategic Acquisitions and Developments: Prologis' focus on strategic acquisitions and developments has bolstered its fourth-quarter revenues. The company's acquisition of a 1.1 million square foot distribution center in California in the third quarter of 2024 contributed to its revenue growth. Prologis' acquisition cost was $384 million, with a weighted average stabilized cap rate of 5.9%.
2. Healthy Leasing Activity: Prologis has experienced healthy leasing activity, which has contributed to its revenue growth. The company's 78.4% retention rate and 95.6% average occupancy rate in the fourth quarter of 2024 demonstrate the demand for modern logistics facilities and Prologis' ability to meet the needs of its customers.
3. Growth in Same-Store NOI: Prologis has experienced growth in its same-store NOI, which has contributed to its revenue growth. The company's 7.2% year-over-year increase in same-store property cash NOI can be attributed to its ability to increase rents and maintain high occupancy rates. Prologis' average occupancy rate in the fourth quarter of 2024 was 95.8%, and its net effective rent change was 66.3%.
4. Expansion into New Markets: Prologis has expanded its presence into new markets, which has contributed to its revenue growth. The company's focus on high-barrier, high-growth markets has allowed it to tap into new opportunities and diversify its revenue streams. For example, Prologis' expansion into the European market has contributed to its revenue growth, as evidenced by the company's 96% occupancy rate in Northern Europe in the third quarter of 2024.



In conclusion, Prologis' strong fourth-quarter and full-year 2024 results demonstrate the company's ability to navigate the current economic climate and capitalize on long-term trends. The company's strategic focus on high-barrier, high-growth markets, coupled with its industry-leading cost efficiency and strong balance sheet, positions it well to maintain its market leadership and support its growth initiatives. As Prologis continues to execute on its strategic plan, investors can expect the company to deliver solid liquidity and financial stability in the coming quarters.