Prologis Inc (NYSE:PLD) posts solid result

Prologis Inc (NYSE:PLD) stock rose 2.17% (As on Jan 20, 11:30:02 AM UTC-4, Source: Google Finance) after the company posted better than expected result for the fourth quarter of FY 21. Net effective rent change on rollover accelerated to 33%, up 510 basis points sequentially and was led by the U.S. at over 37%. Average occupancy was 97.4%, up 80 basis points sequentially. Cash same-store NOI growth remained strong at 7.5% for the quarter and 6.1% for the full year.

During the fourth quarter, Prologis and its co-investment ventures issued $2.9 billion of debt at a weighted average interest rate of 1.1 percent, and issued $11.5 billion of debt for the full year at a weighted average interest rate of 1.3 percent, including $906 million in green bonds. The company maintained its leading liquidity position with approximately $5.0 billion in cash and availability on its credit facilities at year-end.

As of December 31, 2021, debt as a percentage of total market capitalization was 13.5 percent and the company’s weighted average interest rate on its share of total debt was 1.7 percent with a weighted average term of 10.0 years. The combined investment capacity of Prologis and its open-ended ventures, at levels in line with their current ratings, is approximately $15.5 billion.

PLD in the fourth quarter of FY 21 has reported the adjusted funds from operations per share of $1.12, beating the analysts’ estimates for the adjusted funds from operations per share of $1.10, according to Zacks Investment Research. The company had reported the adjusted revenue of $1.07 billion in the fourth quarter of FY 21, beating the analysts’ estimates for revenue of $1.06 billion.

Prologis expects full-year funds from operations in the range of $5 to $5.10 per share. The company expects cash same-store NOI growth to range between 6% and 7%, and average occupancy to range between 96.5% to 97.5%. The company is forecasting rent growth in the markets to be 11% in the U.S. and 10% globally. For Strategic Capital, the company expects revenue excluding promotes to range between $540 million and $560 million. The company expects net promote income of $0.55 per share for the year. The company is forecasting development starts of $4.5 billion to $5 billion with approximately 35% build-to-suits. Dispositions will range between $1.5 billion and $1.8 billion, two-thirds of which the company expects to close this quarter. The company projects core FFO, including the $0.55 of net promote income, to range between $5 and $5.10 share, representing 22% year-over-year growth at the midpoint.

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