Prologis Inc. (NYSE:PLD), the world’s leading logistics real estate investment trust (REIT), posted on Wednesday solid fourth-quarter and 2019 results, and raised its outlook for 2020.
The San Francisco-based company reported that core funds from operations (FFO), the key metric for measuring a REIT’s cash flow, came in at 84 cents per diluted share in the fourth quarter, compared with 80 cents per diluted share in the 2018 period. For all of 2019, core FFO was $3.31 a diluted share, compared with $3.03 a share in 2018.
Fourth-quarter 2019 occupancy rates dropped to 96.5% from 97.5% in the 2018 quarter as the company said it prioritized rental rate quality over occupancy levels. Rents in the quarter rose by nearly 400 basis points over the increases in the 2018 quarter.
Fourth-quarter 2019 revenue rose to $826 million over $807 million in 2018. For the full year, revenues came in at $3.3 billion from $2.8 billion, the company said.
The company boosted its 2020 FFO guidance to $3.75 per share from $3.67 a share and net earnings to $2.13 a share from $1.98 a share. It expects year-end occupancy rates to be at 97%, up slightly from the initial projection of 96%. The 2020 guidance includes the company’s $4 billion acquisition of Industrial Property Trust, which closed earlier this month, and its $12.4 billion purchase of Liberty Property Trust, which is expected to close Feb. 4. Both deals were announced last year. Prologis currently owns and manages about 800 million square feet of logistics properties worldwide.
Prologis Chairman and CEO Hamad R. Moghadam said in a statement that the company’s cumulative earnings growth over the past three years has “surpassed our expectations materially.” Prologis completed a three-year strategic plan, known as Vision 2019, at the end of last year.