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Prologis Reaps $1.6B in Proceeds, Exceeds Target Mid-Point
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Prologis Inc. (PLD - Free Report) reaped proceeds of $1.6 billion since the start of 2016 through May 31, from non-strategic dispositions, fund contributions and fund rebalance. The amount is not only in line with its prior guidance but also takes the company over half way toward the mid-point of its target for capital proceeds of around $2.84 billion for the year.
The company also has a number of properties representing $220 million in value under binding agreements. With sales to a varied group of buyers across different geographical regions, disposition activity has been particularly strong, the company said.
Breakup of Proceeds
Specifically, dispositions led to the generation of $600 million in proceeds, contributions amounted to $360 million, and installment sale related to Facebook Inc. totaled $198 million. Moreover, ownership rebalancing activities in its joint ventures generated $411 million. With these capital proceeds, Prologis stands well to self-fund its capital deployment moves in the future.
Opportunities and Concerns
Notably, amid decent growth in the industrial market, thanks to the rapidly growing e-commerce industry, demand for logistics infrastructure and efficient distribution networks is increasing, giving this industrial real estate investment trust (REIT) ample scope to leverage growth opportunities.
Yet, rising competition and interest rate issues are concerns before the company. Also, a whole lot of new construction is expected over the next two years which can put a pause on growth next year.
Past Performance
Prologis came up with first-quarter 2016 core funds from operations per share of 61 cents, beating the Zacks Consensus Estimate of 59 cents and improving from the year-ago quarter figure of 49 cents. Results were driven by growth in same store net operating income and occupancy gains.
Zacks Rank & Stocks to Consider
Prologis currently has a Zacks Rank #3 (Hold). However, investors interested in the REIT industry may consider stocks like DCT Industrial Trust Inc. and PS Business Parks Inc. . Both these stocks carry a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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Prologis Reaps $1.6B in Proceeds, Exceeds Target Mid-Point
Prologis Inc. (PLD - Free Report) reaped proceeds of $1.6 billion since the start of 2016 through May 31, from non-strategic dispositions, fund contributions and fund rebalance. The amount is not only in line with its prior guidance but also takes the company over half way toward the mid-point of its target for capital proceeds of around $2.84 billion for the year.
The company also has a number of properties representing $220 million in value under binding agreements. With sales to a varied group of buyers across different geographical regions, disposition activity has been particularly strong, the company said.
Breakup of Proceeds
Specifically, dispositions led to the generation of $600 million in proceeds, contributions amounted to $360 million, and installment sale related to Facebook Inc. totaled $198 million. Moreover, ownership rebalancing activities in its joint ventures generated $411 million. With these capital proceeds, Prologis stands well to self-fund its capital deployment moves in the future.
Opportunities and Concerns
Notably, amid decent growth in the industrial market, thanks to the rapidly growing e-commerce industry, demand for logistics infrastructure and efficient distribution networks is increasing, giving this industrial real estate investment trust (REIT) ample scope to leverage growth opportunities.
Yet, rising competition and interest rate issues are concerns before the company. Also, a whole lot of new construction is expected over the next two years which can put a pause on growth next year.
Past Performance
Prologis came up with first-quarter 2016 core funds from operations per share of 61 cents, beating the Zacks Consensus Estimate of 59 cents and improving from the year-ago quarter figure of 49 cents. Results were driven by growth in same store net operating income and occupancy gains.
Zacks Rank & Stocks to Consider
Prologis currently has a Zacks Rank #3 (Hold). However, investors interested in the REIT industry may consider stocks like DCT Industrial Trust Inc. and PS Business Parks Inc. . Both these stocks carry a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>