By Angela Chen
Prologis Inc. said the recovering economy and high rates of
development leasing buoyed results in the fourth quarter as its
funds from operations--a key industry metric--grew 14%.
The current Prologis was formed in June 2011, when the nation's
two biggest publicly traded warehouse owners--Prologis and AMB
Property Corp.--merged in one of the largest real-estate deals
since the recession. The San Francisco-based real-estate investment
trust has continued to benefit from a rental rebound that has
raised occupancy rates and profits on its U.S. warehouses.
"As we closed out the year, our global occupancies continued to
climb and development leasing reached its highest level in seven
years," said Chief Executive Hamid R. Moghadam.
Overall, Prologis reported a quarterly profit of $410.3 million,
compared with a year-earlier profit of $61.2 million. On a
per-share basis, which reflects the impact of preferred dividend
payments, the profit was 81 cents, up from 12 cents.
Core funds from operations improved to 48 cents a share from 43
cents.
Revenue grew 3.2% to $451 million, while rental revenue
increased 6% to $402 million.
Analysts polled by Thomson Reuters had expected per-share
earnings of 9 cents and revenue of $366 million.
Tenant retention was 85.5% and rental rates on leases signed
during the quarter were 12% higher than prior rents.
As of the end of the quarter, the occupancy rate was 96.1%, up
1% from last year and 1.1% from the previous quarter. The increase
was driven in part by increases in the company's European
portfolio.
For 2015, the company expects funds from operations of $2.04 to
$2.12 a share and earnings of 40 cents to 48 cents a share.
Analysts had called for earnings of 52 cents.
Shares have been up about 26% in the past 12 months through
Monday's close.
Write to Angela Chen at angela.chen@wsj.com
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