Loading...
01/10 16:58
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presented a mixed picture. While there were positive elements like increased strategic capital revenue and development starts, alongside optimistic market rent growth and strong demand in certain sectors, there were also concerns. These include slightly elevated bad debt expenses, decelerating same-store NOI growth, and unclear management responses on data center strategies. The Q&A section highlighted both strengths and weaknesses, resulting in an overall neutral sentiment, with no clear catalyst to drive a strong stock price movement.
Core FFO (Funds From Operations) $1.49 per share including net promote expense and $1.50 per share excluding net promote expense, both ahead of forecast.
Leasing Activity Record leasing of nearly 62 million square feet, with occupancy growing to 95.3%, an increase of 20 basis points year-over-year. This was supported by a pickup in new leasing, healthy renewal activity, and heightened build-to-suit demand.
Rent Change 49% on a net effective basis and 29% on cash, reflecting durability in lease mark-to-market. Lease mark-to-market ended September at 19%, capturing $75 million of NOI during the quarter and a further $900 million of NOI as leases roll.
Same-Store Growth Net effective same-store growth was 3.9% and cash same-store growth was 5.2% during the quarter.
Build-to-Suit Investments $1.6 billion of total expected investment for 21 build-to-suits signed so far this year, with 9 signed in the third quarter.
Energy Business Delivered 28 megawatts of solar generation and storage in the quarter, with 825 megawatts of current capacity. On track to deliver 1 gigawatt by year-end.
Financing Activity Closed on $2.3 billion in financing, including a EUR 1 billion raise at 3.5%. In-place cost of debt is 3.2% with an average remaining life of over 8 years.
Absorption and Market Vacancy 47 million square feet of absorption in U.S. markets during the third quarter, holding market vacancy steady at 7.5%.
Development Starts Development starts expected to range between $2.75 billion to $3.25 billion for the year, with 2/3 of third-quarter volume in build-to-suits.
Data Center Business Expansion: Prologis moved another 1.5 gigawatts of additional capacity to advanced stages, totaling 5.2 gigawatts of power secured or in advanced stages. This represents a $15 billion investment as a powered shell and up to 4x that if delivered in a turnkey format.
Energy Business Growth: Delivered 28 megawatts of solar generation and storage in the quarter, with 825 megawatts of current capacity. On track to achieve a 1-gigawatt goal by year-end.
Leasing Activity: Record leasing quarter with 62 million square feet signed, increasing occupancy to 95.3%.
Geographic Market Performance: Strongest U.S. markets include Southeast and Texas, with solid absorption in Houston, Dallas, and Atlanta. Latin America, particularly Brazil and Mexico, delivered the highest same-store growth. Europe and Japan also showed strong performance.
Build-to-Suit Developments: Signed 9 additional build-to-suits this quarter, totaling 21 for the year, amounting to $1.6 billion in expected investment. Build-to-suits expected to represent over half of development volume for the year.
Customer Sentiment and Demand: Improved customer sentiment and leasing velocity, with larger occupiers focusing on network optimization.
Capitalization Strategies for Data Centers: Exploring additional capitalization strategies to fully capture the data center opportunity.
Strategic Capital Business: Progress on new investment vehicles drawing strong interest, positioning for the next growth phase.
Market Rent Declines: Market rent declines have been slowing, but rents remain soft in certain regions like Southern California, which is expected to lag the broader inflection in operating conditions in the near term.
Supply Chain and Construction Pipeline: The construction pipeline is depleting, and starts are below pre-COVID levels, which could impact future supply and development opportunities.
Energy Prices and Power Shortages: Increasing energy prices and forecasted shortages in power could pose challenges for customers and impact Prologis' energy business.
Economic and Market Uncertainty: Uneven quarters in strategic capital business and modest net inflows indicate some level of economic and market uncertainty.
Geographic Market Variability: While some regions like Latin America and Japan are performing well, others like Southern California and parts of the U.S. show slower recovery or softer rents.
Regulatory and Capitalization Challenges: Exploration of additional capitalization strategies for data centers indicates potential challenges in securing adequate funding for large-scale projects.
Average Occupancy: Average occupancy at our share is unchanged at the midpoint of 95%.
Rent Change: Rent change will average in the low 50s for the full year.
Same-Store NOI Growth: The range for same-store NOI growth is increasing to 4.25% to 4.75% on a net effective basis and 4.75% to 5.25% on a cash basis.
G&A Guidance: G&A guidance is increasing to a range of $460 million to $470 million.
Strategic Capital Revenue Guidance: Strategic capital revenue guidance is increasing to a range of $580 million to $590 million.
Development Starts: Development starts at our share are increasing to a new range of $2.75 billion to $3.25 billion.
Disposition and Contribution Guidance: Combined disposition and contribution guidance is increasing by $500 million to a range of $1.5 billion to $2.25 billion at our share.
GAAP Earnings: GAAP earnings are expected to range between $3.40 and $3.50 per share.
Core FFO Including Net Promote Expense: Core FFO, including net promote expense, will range between $5.78 and $5.81 per share.
Core FFO Excluding Net Promote Expense: Core FFO, excluding net promote expense, will range between $5.83 and $5.86 per share, a $0.02 increase from prior guidance.
The selected topic was not discussed during the call.
The earnings call presented a mixed picture. While there were positive elements like increased strategic capital revenue and development starts, alongside optimistic market rent growth and strong demand in certain sectors, there were also concerns. These include slightly elevated bad debt expenses, decelerating same-store NOI growth, and unclear management responses on data center strategies. The Q&A section highlighted both strengths and weaknesses, resulting in an overall neutral sentiment, with no clear catalyst to drive a strong stock price movement.
The earnings call presents a mixed outlook: strong leasing activity and strategic expansions are offset by increased expenses and reduced guidance. The Q&A section reveals concerns about bad debt and macroeconomic uncertainty, but also highlights potential long-term growth in key markets. The lack of clear guidance on certain issues tempers optimism. Overall, the sentiment is neutral, with no strong catalysts to drive significant stock price movement.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
