Industrial giant Prologis is running out of space to rent, as vacancy remains at historic lows for the overall sector and rents continue to climb. That's led the company to revise its annual rent growth estimates up 11% from last quarter.
Prologis ended Q1 with 97.4% occupancy, a figure that was consistent with Q4 2021 and counters the typical Q1 decline.
"Given this pace in our outlook on demand, we're revising our annual rent growth forecast to 22% in the US and 20% globally, in line with 2021," said Tim Arndt, Prologis' new chief financial officer, on a recent earnings call. Market rents in coastal cities are predicted to rise by up to 26%. Over the course of the first quarter, market rents for warehouse space in the US overall grew by 8.5% and by 6.5% globally.
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