Prologis’s European arm has posted increases in rents and leasing activity for the first quarter of the year, in the face of “record demand”.
The industrial giant’s European business recorded an 18.5% jump in rent. Leasing activity totalled around 11.2m sq ft during Q1, signing some 2.4m sq ft of new leases and 8.8m sq ft of renewals. This compares with total leasing activity of around 10.1m sq ft in Q1 last year.
Its overall portfolio stood at around 215.3m sq ft, up from around 201.3m sq ft during the same period in 2021.
The developer recorded four new development starts, comprising a circa 111,100 sq ft build-to-suit scheme and three speculative developments totalling around 928,600 sq ft, which are 40% leased.
In the first quarter, Prologis Europe acquired one building with a net rentable area of 236,440 sq ft in Sweden and four land plots in the Czech Republic, Hungary, Italy and Germany totalling 3.7m sq ft.
Ben Bannatyne, president of Prologis Europe, said: “Demand for tailored and sustainable logistics space highlights the urgent need for resilience as acute scarcity meets record demand and rents accelerate.
“Leasing activity in Europe pushed 1m sq m (10.7m sq ft) in the first quarter. We are leveraging our proprietary data and strengthening our built-for-the-future approach to meet our customers’ needs. We have pivoted from responsiveness to readiness, putting us in the unique position to deliver value beyond our real estate.”
Bannatyne added that Prologis is doing its part to stand with Ukraine, and that it is making vacant space available to organisations for the storage of aid goods related to refugee relief efforts. These will be offered free of charge to humanitarian organisations and local authorities within its Space for Good programme.
The news comes as the wider business posted growth in earnings for the quarter, with net earnings per diluted share rising to $1.54 (£1.18) during the period, compared with $0.49 in Q1 last year.
Hamid Moghadam, co-founder and chief executive of Prologis, said: “The need for resilience in the supply chain continues to drive record demand despite today’s economic and geopolitical risks.”
Timothy Arndt, chief financial officer of Prologis, said: “Our lease mark-to-market of 47% provides substantial embedded earnings growth for years to come even without any further increase in market rents. The long-term growth outlook for our business and balance sheet has never been stronger.”
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