With Global Trade Improving, Prologis Forecasts a Strong 2012
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Prologis’ Hamid Moghadam says the
continuing rebuilding of its
customers inventories will
be a continuing theme in 2012
(Mark Your Calendars: RealShare REAL ESTATE 2012, March 22nd in Los Angeles).
SAN FRANCISCO-“We had an excellent quarter with financial and operating results that were ahead of plan,” explained Hamid Moghadam, chairman and co-chief CEO of Prologis Inc., during a fourth quarter results conference call. “The team came together seamlessly and we made excellent progress on our strategic priorities.”
Moghadam explained that some of the more noteworthy accomplishments in Q4 include increasing occupancy to 92.2%, a 120 basis point improvement over the third quarter and “reducing our share of outstanding debt by more than $900 million.”
In addition, he says, “the heavy lifting associated with the merger integration is effectively complete and we have increased our synergy target to an annual savings of $115 million.”
According to Moghadam, the recovery is on track. “Global trade has been improving at a healthy pace and container volume is up as well.” He added that “The continuing rebuilding of our customers’ inventories will be a continuing theme in 2012. We are forecasting a strong 2012.”
Demand is also picking up on the firm’s small and medium sized customers, explained Moghadam.
According to the company’s results, core funds from operations per fully diluted share was $0.44 for the fourth quarter 2011 compared to $0.41 for the same period in 2010. Funds from operations as defined by Prologis per fully diluted share was $0.29 for the fourth quarter 2011 compared to $4.81 for the same period in 2010. The differential between Core FFO and FFO in the fourth quarter 2011 primarily relates to impairment charges and merger costs, says the firm. Net income (loss) per share was $0.10 for the fourth quarter 2011 compared to a net loss of $4.86 for the same period in 2010.
Under operating portfolio metrics, same-store net operating income increased over the prior year by 0.4% in the fourth quarter, compared to a decrease of 0.7% in the third quarter of 2011. Rental rates on leases signed in the fourth quarter same-store pool decreased 4.5%, compared to rental rates on leases signed in the third quarter 2011, which decreased by 8.6%.
During the fourth quarter, the company leased a total of 37.6 million square feet in its combined operating and development portfolios. The company also achieved an 80.1% tenant retention rate for the quarter, signing 22.5 million square feet of renewals.
“Our strong performance for the quarter was driven principally by higher than expected occupancy in the operating portfolio and higher private capital revenues,” explained Walter Rakowich, co-chief executive office. “Additionally, our financial performance benefitted by year-end adjustments including a one-time adjustment to G&A expenses.
During the fourth quarter, the firm completed approximately $1.4 billion of capital markets activities, including debt repurchases, refinancings, and new financings. “We exceeded our balance sheet management and delevering objectives for 2011 and remain committed to building one of the top balance sheets in the industry,” said William Sullivan, chief financial officer. “Carrying this momentum into 2012, a key area of focus is on further improving our financial position and mitigating our exposure to foreign currency.”
In recent Prologis news, as GlobeSt.com just reported, the company just sold 13 industrial properties in England to New York City-based Blackstone for $335 million. Philip Dunne, president of Prologis Europe, said in the statement that the portfolio was sold because it no longer fit within the company’s investment strategy. The firm will redeploy capital, he said.
Categories: West, Industrial, Acquisitions/Dispositions, San Francisco
Natalie Dolce Natalie Dolce, editor of the West Coast region for GlobeSt.com and Real Estate Forum, is responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, Natalie was Northeast bureau chief, covering New York City for GlobeSt.com. Dolce’s background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats Arthur Frommer’s Budget Travel magazine, FashionLedge.com, Co-Ed magazine, and has also freelanced for a number of publications including MSNBC.com and Museums New York magazine. Contact Natalie Dolce.
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