(To read more on the industrial market, click here, and to read more on the debt and equity markets, click here.)
DENVER-Denver-based ProLogis, the world's largest industrial real estate investment trust reported that its net earnings in 2005 rose to $370.07 million, or $1.76 per diluted share. This is more than 6% higher than the $202.8 million, or $1.08 per share, the company posted a year ago.The company's adjusted funds from operations, considered one of the best ways to measure the health of a REIT, rose by 11.5 % to $2.71 per diluted share, compared with $2.43 in 2004. The company also increased the range of the 2006 FFO by 5 cents per share, which brings its new FFO range of $2.95 to $3.15 per share.
"Our strong financial performance in 2005 reflects the significant improvement in global demand for distribution space," says Jeffrey H. Schwartz, chief executive officer. "This customer-driven demand supported further increases in overall occupancies, record leasing activity and positive net absorption across virtually all of the markets in which ProLogis operates worldwide. In addition to substantial improvement in our property operations, we also achieved solid growth in income from our development business and income and fees from our property funds."
Leasing in the company's stabilized properties increased from 92.3% a year ago to 94.5% at year's end, the highest level since the second quarter of 2001. Same-store net operating income for the quarter increased 0.52% and was up 1.46% for the year. The company also experienced record global leasing activity, including new leases and renewals, of approximately 95 million sf for the year, up 44% from last year's leasing activity of 66 million sf.
"We track the top 30 North American logistics markets very closely and continue to see increases in overall occupancies, which rose by an average of 29 basis points for the quarter and 122 basis points for the year," Schwartz says. "Importantly, this improvement occurred during a time when approximately 100 million sf of new distribution space was added to the overall supply in these key markets. This positive absorption of space has led to firming of rental rates overall and rate increases in a greater number of North American markets."
The company achieved 11.3% growth from Corporate Distribution Facilities Services disposition activity over 2004. Development starts, including those in CDFS joint ventures, reached a record $2.15 billion, in line with the company's guidance. The 25 million sf of distribution space completed during 2005 was approximately 65% leased at year end. In addition, it ended the year with a record development pipeline of $3.3 billion of completed developments, repositioned acquisitions and properties under development.
Assets owned and under management in ProLogis property funds grew to nearly $10 billion at year end, leading to an increase of 19.6% in ProLogis' share of FFO from funds and a 31.8% increase in management fees.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
