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Prologis (PLD) Taps Growth With $25B in 2020 Investment Activity

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The industrial asset class has grabbed the limelight for showing resilience amid the pandemic with low vacancy rates, high asking rents and robust rent collections. Industry behemoth Prologis (PLD - Free Report) has been witnessing robust demand for high-quality logistics real estates in key locations across the globe, enabling it to continue with its investment activity.

The company completed $25 billion of investment activity on an owned and managed basis. Particularly, investments in mergers and acquisitions amounted to $17 billion in 2020, while development starts totaled $2.7billion. Building acquisitions amounted to $2 billion and building & land dispositions amounted to $1.5 billion. Contributions also totaled $1.8 billion in 2020.

Reflecting positive sentiments, the company’s shares were up 2.28% during Friday’s regular session.

Since the ProLogis – AMB merger in 2011 through year-end 2020, this industrial REIT has accomplished investment transactions aggregating more than $131.4 billion across 30 global markets. These investments comprise a wide array, including largest M&A transactions in the real estate sector as well as individual off-market deals below $5 million.

Moreover, Prologis has created a new senior position, appointing long-time employee Dan Letter as global head of Capital Deployment effective Jan 1 this year, in a bid to support its increasing growing global capital-deployment moves.

The strategic investments have been bolstering scale in its industry. In a rising e-commerce market, the industrial real estate asset category continues to play a pivotal role, transforming the way how consumers shop and receive their goods. Services like same-day delivery are gaining traction and last-mile properties in high-income urban areas are witnessing solid pricing, occupancy and growth in rentals. Companies are making immense efforts to improve supply-chain efficiencies, propelling demand for logistics infrastructure and efficient distribution networks.

Furthermore, in light of the coronavirus pandemic, warehouse operations have become more essential with more e-commerce customers. Over the long term, apart from the fast adoption of e-commerce, logistics real estate will likely benefit from a likely increase in inventory levels post the coronavirus crisis. This is opening up prospects for Prologis, and other industrial REITs like Duke Realty Corp. (DRE - Free Report) , Rexford Industrial Realty, Inc. (REXR - Free Report) and Terreno Realty Corporation (TRNO - Free Report) among others.

Given Prologis’ solid capacity and advantageous location of the company’s land bank, it is well poised to bank on this trend. Particularly, the sites are positioned near large population centers that are suited for serving as the last-mile warehouse before goods are delivered to consumers.

Prologis currently carries a Zacks Rank #3 (Hold). Its shares have appreciated 3.6% over the past year, as against its industry’s decline of 7.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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