Q2 2024 Prologis Inc Earnings Call Transcript
Key Points
- Prologis Inc (PLD) achieved a 27% increase in leasing activity, releasing 52 million square feet in Q2 2024.
- Global occupancy ended the quarter at 96.5%, with the US portfolio outperforming the market by over 320 basis points.
- Net effective rent change was nearly 74% based on commencements, indicating strong rent growth potential.
- Prologis Inc (PLD) deployed over $700 million into new development projects and acquisitions, and closed over $1 billion in dispositions and contributions.
- The company raised $1.2 billion of debt at a weighted average rate of 4.4% and launched a $1 billion commercial paper program, reducing short-term borrowing costs.
- Decision-making among customers remains slow, with many optimizing existing footprints before committing to new space.
- Rent growth is expected to be anemic in most markets and down modestly in some, particularly in Southern California.
- Effective market rents declined 2% during the quarter, with 75% of the decline attributed to specific markets.
- Development leasing has slowed, and there is increased vacancy in the portfolio.
- The company expects occupancy to potentially dip below 96% in the near term due to tougher lease rollovers and longer lease-up times.
Welcome to the Prologis second quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. I'd now like to turn the call over to Justin Meng, Senior Vice President, Head of Investor Relations. Thank you. You may begin.
Thanks, Darryl. Good morning, everyone. Welcome to our second quarter 2024 earnings conference call. The supplemental document is available on our website at prologis.com under Investor Relations.
I'd like to state that this conference call will contain forward-looking statements under federal securities laws. These statements are based on current expectations, estimates, and projections about the market and the industry in which Prologis operates as well as management's beliefs and assumptions.
Forward-looking statements are not guarantees of performance and actual operating results may be affected by a variety of factors. For a list of those factors, please refer to the forward-looking statements notice in our 10-K or
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