Good ProLogis Growth Outside U.S.

ProLogis (PLD - Snapshot Report) is still the best-positioned industrial REIT with a stable balance sheet and global platform. Operationally, the company’s portfolio continues to perform well; same-store rents and net operating income continue to increase and overall portfolio occupancy remains high. We expect operations to remain stable throughout the year, although the continuing weakness in the U.S. economy adds near term risk. Thus, we maintain our Buy rating for ProLogis.

PLD will weather the current economic downturn better than its peers. The company has a large, diversified development pipeline, with high projected yields that should be accretive to earnings as projects come on line. The company’s fund business continues to grow at a healthy pace. Going forward, over 80% of the company’s incremental growth will be generated outside of the U.S., which is good considering the current state of the domestic economy.

PLD now trades at 12.5x 2008 FFO estimates, putting it at a 3% premium to its peer group average. PLD’s U.S. properties are well leased and diversified across the county. In addition, the company continues to expand into high growth markets around the world and PLD continues to lessen exposure to North America. We are setting our six-month price target at 13.5x 2008 estimates or $67 per share.

Read the full analyst report on PLD