Prologis PLD reported core funds from operations (FFO) of $1.28 in the first quarter of 2024, which was in line with the consensus estimate. It lowered FFO guidance by 1% to a new range of $5.37 to $5.47, which was slightly below analysts' expectations of $5.50 at the time of the print.
"While operating conditions are healthy in the majority of our markets, customers remain focused on controlling costs, which is weighing on decision making and the pace of leasing" said Hamid Moghadam, co-founder and CEO.
Rental revenue increased 12% year over year (y/y) to $1.83 billion, pushing consolidated revenue 11% higher to $1.96 billion.
Occupancy across Prologis' portfolio was 96.8% in the period, which was 30 basis points lower than the fourth quarter and 120 bps lower y/y. Management's new 2024 outlook calls for average occupancy to be between 95.75% and 96.75%, a 75-bp reduction at the midpoint of the range.
Net effective rent change (over the entire lease term) was 67.6%, 120 bps lower y/y.
"A volatile and persistently high interest rate environment, together with mounting geopolitical concerns, contribute to this indecision and its short-term effect on net absorption" Moghadam said. "We remain optimistic about the fundamentals of our business, while being prepared for a slower environment in the next quarter or two."
Shares of PLD were down 5.6% at 11:44 a.m. EDT on Wednesday compared to the S&P 500, which was off 0.3%.
The company will host a call Wednesday at noon EDT to discuss first-quarter results.
Table: Prologis' key performance indicators
The post Prologis reports in-line Q1, slightly trims 2024 outlook appeared first on FreightWaves.
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