Quarterly financial results unveiled by Prologis for the second quarter of the year
## Prologis Beats Second-Quarter Expectations and Raises Full-Year Outlook
Prologis, the world's largest industrial real estate owner, has reported strong results for the second quarter, beating analysts' expectations and raising its full-year outlook.
The company's core funds from operations (FFO) for the second quarter stood at $1.46 per share, 4 cents above consensus and 12 cents higher year over year. Total revenue for the quarter was up 9% year over year, reaching $2.18 billion.
One of the key drivers of Prologis' success has been the increase in new leases commenced, which totaled 51.2 million square feet in the second quarter, an increase of 10% compared to the same period last year.
Despite a slight dip in average occupancy for the second quarter, sliding 120 basis points year over year to 94.9%, the company remains confident for the remainder of the year. Prologis President Dan Letter stated that customers are ready to sign new leases, contributing to the strong momentum in build-to-suit projects.
In line with this trend, Prologis has raised its full-year FFO guidance. The new range is $5.80 to $5.85 per share, with the low end of the guidance increased by 10 cents. The outlook does not mention any changes to the full-year FFO guidance range of $5.80 to $5.85 per share.
The company's outlook for development starts is between $2.25 billion and $2.75 billion, a new high for Prologis. About 65% of these developments were pre-leased, indicating robust demand for custom spaces.
Prologis will host a call at noon EDT on Wednesday to discuss second-quarter results and provide further details about its outlook for the rest of the year.
Sources: [1] Prologis Q2 2022 Earnings Release, 2022. [2] Prologis Q2 2022 Earnings Conference Call Transcript, 2022. [3] Prologis Q2 2022 Supplemental Information, 2022.
Prologis' strong financial performance, as evidenced by the increased core funds from operations (FFO), suggests a favorable investing climate in both the industrial real-estate and finance sectors. The company's optimism for build-to-suit projects and robust demand for custom spaces could potentially stimulate investments in real-estate development, contributing to the industry's growth.
