Prologis tops Q3 estimates, raises development starts forecast again

Prologis, a leading logistics warehouse operator, exceeded third-quarter expectations and raised its forecast for new developments. The company reported $2.39 billion in consolidated revenue, an 8% year-over-year increase, surpassing analyst estimates by 8%. Core funds from operations (FFO) stood at $1.60 per share, 11 cents higher year-over-year and 3 cents above expectations.

Lease signings totaled 60 million square feet, while lease commencements grew by 15% year-over-year to 55.9 million square feet. Occupancy improved by 30 basis points year-over-year to 95.1%. CEO Dan Letter noted that customers are reducing inventory, and excess capacity has largely cleared, supported by e-commerce, advanced manufacturing, and data center growth.

Prologis also raised its 2026 core FFO outlook to a range of $6.25 to $6.29 per share, assuming 95.25% to 95.5% occupancy and $5 billion to $5.75 billion in development starts, an 8% increase from the previous quarter. The company recently acquired Segro, a London-based logistics warehouse operator, expanding its European footprint by 47% to 368 million square feet and $269 billion in assets under management.