Prologis(PLD)2025-04-29 20:08Portfolio and Operations - Prologis operates a portfolio of approximately 1.3 billion square feet across 20 countries, focusing on high-barrier, high-growth logistics markets[142] - The occupancy of the operating portfolio was 95.1% as of March 31, 2025, with a net effective rent change of 53.7% on leases that commenced during the same period[165] - The Owned and Managed (O&M) operating portfolio included 5,433 properties with a total of 1,201 million square feet, achieving an overall occupancy rate of 95.2% as of March 31, 2025, down from 95.9% at the end of 2024[196] - Prologis actively manages its portfolio through leasing, property management, and development, recycling capital from property dispositions into new investments[145] Financial Performance - Rental operations contribute 90% to 95% of consolidated revenues, with a weighted average lease term of 69 months for leases commenced in the last twelve months[154] - The Real Estate Segment generated NOI of $1,501 million for the three months ended March 31, 2025, compared to $1,362 million for the same period in 2024, reflecting a $139 million increase[173] - The Strategic Capital Segment reported NOI of $80 million for the three months ended March 31, 2025, up from $50 million in the same period in 2024[185] - Same Store Property NOI – Net Effective increased by 5.9% from $1,409 million in Q1 2024 to $1,493 million in Q1 2025[202] - Funds from Operations (FFO) attributable to common stockholders for Q1 2025 was $1.384 billion, up from $1.258 billion in Q1 2024, representing a 10% increase[257] - Core FFO attributable to common stockholders for Q1 2025 was $1.356 billion, compared to $1.222 billion in Q1 2024, indicating an 11% increase[257] Development and Investment - Prologis has the potential to support the development of $36.3 billion of total expected investment (TEI) in newly developed buildings[162] - The company started 11 new development buildings during the first quarter of 2025, with a total estimated investment (TEI) of $646 million, 78.0% of which were build-to-suit projects[180] - The company expects to complete the development and leasing of 81 properties, which are currently 32.2% leased, with a total investment of $2.6 billion and a total expected investment of $4.4 billion upon completion[221] - The estimated value at completion for the consolidated development portfolio was $1,191 million, with an estimated weighted average margin of 26.1%[180] Capital and Liquidity - The company had total available liquidity of $6.5 billion as of March 31, 2025, including $5.8 billion in borrowing capacity and $0.7 billion in unrestricted cash[170] - The company had available unrestricted cash balances of $0.7 billion at March 31, 2025[225] - The company had total debt of $32,262 million as of March 31, 2025, compared to $30,879 million at December 31, 2024, indicating a 4.5% increase[224] - The weighted average remaining maturity of consolidated debt was 9 years with a weighted average interest rate of 3.1% as of March 31, 2025[163] Interest and Currency Management - The weighted average interest rate on total debt remained stable at 3.1% for both March 31, 2025, and December 31, 2024[224] - The company’s variable rate debt totaled $1.6 billion, with a weighted average effective interest rate of 2.9%[263] - A 10% increase in interest rates on average outstanding variable rate debt would lead to an additional annual interest expense of $4 million[263] - The company uses derivative instruments to manage interest rate risk on variable rate debt[262] - The company had foreign currency contracts with an aggregate notional amount of $1.5 billion, primarily in British pound sterling, Canadian dollar, euro, and Japanese yen[261] Sustainability and Strategic Focus - Prologis emphasizes sustainability and efficiency in its operations, integrating environmental, social, and governance principles into its business strategy[147] - The company plans to invest in renewable energy and mobility infrastructure to achieve sustainability goals[225] - The company is focused on build-to-suit development for logistics and data centers, while remaining disciplined in capital deployment amid economic uncertainty[166] Earnings and Expenses - Total income tax expense increased to $43 million in Q1 2025 from $33 million in Q1 2024, reflecting a 30.3% year-over-year increase[215] - Net interest expense rose from $193 million in Q1 2024 to $232 million in Q1 2025, attributed to higher interest rates and the issuance of senior notes[208] - Cash paid for interest increased to $269 million in Q1 2025 from $211 million in Q1 2024, reflecting a 27.5% increase[236] - Depreciation and amortization expenses increased from $638 million in Q1 2024 to $652 million in Q1 2025, reflecting a $14 million change[191] Shareholder Returns - The company paid quarterly cash dividends of $1.01 per common share in Q1 2025, compared to $0.96 in Q1 2024, reflecting a 5.2% increase[242] - Net earnings attributable to noncontrolling interests rose to $47 million in Q1 2025, compared to $45 million in Q1 2024, marking a 4.4% increase[216]