Prologis misses Q4 rental income estimates on weak freight demand
Jan 17 (Reuters) - Warehouse-focused real estate investment trust (REIT) Prologis missed analyst estimates for fourth-quarter rental income on Wednesday, hurt by persistent weakness in freight demand.
A slowdown in freight demand from pre-pandemic levels due to an uncertain macroeconomic environment have led to companies delaying decisions related to warehouse expansion, leading to higher vacancies in key markets, including Southern California.
Prologis warned in October "negative customer sentiment" will weigh on demand until the economy stabilizes. The company added it expects the current trend of supply outpacing demand for warehousing to continue, with a reversal later in the year.
The REIT, which boasts of customers such as Amazon, Fedex, UPS and Walmart, reported a rental income of $1.75 billion, compared with analyst estimates of about $1.81 billion, as per LSEG data.
Last month, brokerage Mizuho said Prologis' sub-markets were seeing a "fair amount of deceleration" in demand coupled with slow rent growth, leading to a greater risk to funds from operation (FFO) in 2024.
The San Francisco, California-based company forecasted core FFO between $5.42 and $5.56 per share, compared with analysts' estimate of $5.49 per share.
It reported a core FFO of $1.26 per share for the quarter ended December 31, 2023, in line with analysts' estimates.
(Reporting by Aishwarya Jain in Bengaluru)
