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SAN FRANCISCO-The locally based industrial REIT AMB Property Corp. said Monday that occupancy in its 115-million-sf global portfolio jumped 120 basis points in the final three months of 2005 and ended the year at 95.8%. The data was released along with the company's fourth quarter performance, which included FFO per fully diluted share and unit of $1.15, as compared to $0.62 for the same period of 2004.
Based on preliminary data provided by Torto Wheaton Research, AMB estimates that US industrial vacancy at the end of the fourth quarter was 9.7%, representing a 40 basis point improvement from the prior quarter. There have been seven consecutive quarters of improvement, according to AMB.
Rents on lease renewals and rollovers in AMB's same store pool declined 4.6% in the fourth quarter of 2005. The results are an improvement from declines of 7.9% in the third quarter and 13.6% in the fourth quarter of 2004.
At 95.8%, AMB's occupancy in its operating portfolio is at its highest since the third quarter of 2001. "On a macro level, demand for US industrial space is robust, as evidenced by a 170 basis points decline in availability for the year, to 9.7%, and our preliminary research indicates near record breaking net absorption during 2005," says AMB chief executive Hamid Moghadam. "We believe we are well positioned to take advantage of this environment as we continue to expand our global franchise in 2006."
Development completed and added to AMB's operating portfolio in 2005 comprised approximately 2.5 million sf with a total investment of $138 million. AMB began development on approximately seven million sf in 2005, the highest level of annual starts in the company's history, with an estimated total investment at completion of $522 million. New development and renovation starts in the fourth quarter totaled approximately 2.4 million sf in nine projects in North America, Europe and Asia with an estimated total investment of $187 million.
At year end, AMB's industrial development and renovation pipeline comprised 47 projects totaling approximately 11.9 million sf in North America, Europe, and Asia. Total investment in the pipeline's development projects is estimated at approximately $1 billion. All told, the company's land bank can support an estimated 24 million sf of future development.
During the fourth quarter, AMB acquired 2.1 million sf of distribution facilities in 15 buildings at a total acquisition cost of approximately $179 million. The acquisitions expanded AMB's presence in several North American markets and included inaugural investments at the Port of Hamburg and in Shanghai.
The transactions bring the company's full year acquisition activity to approximately 6.9 million sf of distribution facilities and ownership positions in G. Accion and IAT Air Cargo Facilities Income Fund at a total cost of about $604 million.
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