Prologis Europe boosts occupancy levels and development starts in 2014

Prologis Europe has lifted its occupancy ratio above pre-crisis levels as demand continues to be driven by reconfiguration of the supply chain, trade and e-commerce.

'Occupancy levels across Europe continue to rise, driven by the low level of new supply, and we now have an overall occupancy level above the peak of the previous cycle, driven by high levels in the UK and Germany,' president Philip Dunne said on Tuesday following the presentation of the company's earnings.

Prologis Europe ended the fourth quarter of 2014 with 94.9% occupancy, an increase of 140 basis points over the prior quarter and an increase of 130 basis points over the course of 2014. The company leased 1 million m2 in the final quarter and 3.6 million m2 in full-year 2014.

At year end, the company’s operating portfolio comprised 14.3 million m2. Including developments and value-add acquisitions, the total at year-end came to 15.4 million m2.

The improved occupancy ratio of the European operations helped lift overall group levels to 96.1% in Q4, an increase of 100 bps over the same period in 2013 and 110 bps over the prior quarter. For the full year 2014, core funds from operations (Core FFO) per diluted share rose 14% to $1.88, the San Francisco-based company said.

'As we closed out the year, our global occupancies continued to climb and development leasing reached its highest level in seven years,' said Hamid R. Moghadam, chairman and CEO, Prologis. 'The outperformance is a direct result of our long-term strategy of operating in infill markets where global trade and consumption intersect.'

In Europe, the UK was the strongest market last year, followed by northern Europe, Dunne added. 'In Central and Eastern Europe, there has been a recovery in key markets in Poland, the Czech Republic and Hungary. In Southern Europe, we see early signs of stabilisation.'