Yahoo Finance Prologis (PLD) Continues to Expand with Build-to-Suit Deals - Analyst Blog
Prologis Inc. (PLD) is actively capitalizing on global growth opportunities amid improving operating fundamentals in the industrial real estate markets.
Recently, this industrial real estate investment trust (“REIT”) disclosed the signing of a 139,000 square foot build-to-suit deal in Madrid with TNT Express, a 280,000 square foot build-to-suit agreement in Sweden, a 334,000 square foot built-to-suit contract in the Czech Republic as well as a 420,000 square foot build-to-suit accord in U.K.
Prologis is also experiencing solid demand for space at its properties. The company leased 346,000 square feet in Brazil development and preleased 261,000 square feet in Denver project. The company further broke ground on a 1 million square feet state-of-the-art facility in Tracy, CA.
Moreover, aided by lower expenses, Prologis reported better-than-expected results in the third quarter of 2014. The company reported core FFO (funds from operations) per share of 48 cents, which was 2 cents above the Zacks Consensus Estimate and 7 cents ahead of the year-ago quarter figure.
Amid a larger customer base, a rise in e-Commerce application and supply-chain consolidation, these markets see an increasing demand for high-quality logistics facilities. But with new construction starts still slow at picking up pace, rents are increasing in many of the markets.
Prologis, with its solid capacity, is well leveraging this demand-supply imbalance. Its strategic efforts have also driven an encouraging improvement in liquidity. Yet, with intensifying competition and long-term interest rate issues, we are not overtly optimistic about this stock.
To gain deeper insight into Prologis, you can refer to our updated research report, which was issued on Dec 19, 2014.
Over the last 30 days, the Zacks Consensus Estimate for 2014 moved a cent up to $1.86 per share, while for 2015, it remained unchanged at $2.00. The stock currently has a Zacks Rank #3 (Hold).
Stocks that Warrant a Look
Other better-ranked REIT stocks include Host Hotels & Resorts, Inc. (HST), Public Storage (PSA) and RLJ Lodging Trust (RLJ). All these stocks carry a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation, amortization and other non-cash expenses to net income.
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