Cargo Business Newswire

Thursday, July 23, 2015

Prologis up on warehouse capacity and high occupancy

San Francisco-based Prologis, the largest U.S. warehouse owner with 670 million square feet in 21 countries, reported strong second-quarter results Tuesday, according to The Wall Street Journal. Results include a net profit of 27 cents a share, more than double earnings from the year-earlier quarter. The company said 95.4 percent of its property is occupied, up nearly one percentage point from a year earlier.

Prologis Chairman and Chief Executive Officer Hamid Moghadam said in an interview with WSJ that smaller warehouse spaces across the U.S. are filling up as small businesses gain more confidence and the housing market continues its recovery.

Prologis’ buildings of 500,000 square feet or more—mainly distribution facilities for retail companies—have been 98 percent occupied for the last four years, a remarkably high occupancy rate in

the real-estate industry. This is a result, Moghadam said, of large e-commerce firms trying to save costs by reducing the number of distribution centers they operate.

Prologis says that for several years, its small warehouse occupancy rate was stuck at about 89 percent, but in the past year that number has gone up to 95 percent.

The warehouse sector is seeing big growth in rents and profits as demand remains high but supply remains relatively constrained. National warehouse and distribution center demand is running at between 225 million and 230 million square feet leased a year, while new supply remains at roughly 165 million square feet.

For more of the Wall Street Journal story: www.wsj.com