Prologis (PLD) Gains Full Ownership In Brazil Portfolio

Industrial REIT – Prologis Inc. (NYSE:PLD) – recently completed the acquisition of its partner’s stake in the Brazil portfolio. This move enabled the company gain full ownership of Prologis CCP, which was a joint venture between Prologis and Cyrela Commercial Properties.

As a result, the previous joint venture, Prologis CCP, which has now been renamed to Prologis Brazil, currently owns and operates 9.2 million square feet of logistics facilities and land. These have the capacity to support 12 million square feet of new logistics facilities in the country’s key markets of São Paulo and Rio De Janeiro.

Notably, this acquisition offers Prologis scope to leverage on growth opportunities in the Brazilian market. Though the country’s economy has witnessed a rough patch earlier, things are anticipated to improve in the upcoming period. In fact, economic reforms and efforts to boost consumption levels are likely to open up prospects for new business. This is expected to drive demand for Prologis Brazil’s industrial real estates.

Prologis has already earned its reputation for being the leading provider of logistics real estate around the globe. The company enjoys ownership or had investments in properties and development projects estimated to total around 684 million square feet in 19 countries as of Jun 30, 2017.

This industrial REIT also continues to display robust fundamentals and improving prospects. In fact, the company reported second-quarter 2017 core funds from operations (“FFO”) per share of 84 cents, beating the Zacks Consensus Estimate of 78 cents. Results reflect growth in rents and high occupancy. Further, this industrial REIT raised its core FFO per share outlook for full-year 2017, buoyed by solid operating fundamentals and higher net promote income.

Amid an improving industrial market, Prologis is well poised to benefit from its capacity to offer modern distribution facilities in strategic in-fill locations. In addition, Prologis remains focused on bolstering its liquidity. However, increase in supply of new facilities and hike in interest rates remain concerns.

Year to date, this Zacks Rank #3 (Hold) stock has risen nearly 18.0% compared with just 3.2% growth recorded by the industry it belongs to.



Key Picks

A few better-ranked stocks in the real estate space are Liberty Property Trust (NYSE:LPT) , PS Business Parks, Inc. (NYSE:PSB) and MGM Growth Properties LLC (NYSE:MGP) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

While Liberty Property Trust and PS Business Parks have expected long-term growth rates of 6% and 5%, respectively, the expected long-term growth rate for MGM Growth Properties is currently pegged at around 15.0%.


Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.


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Prologis, Inc. (PLD): Free Stock Analysis Report

PS Business Parks, Inc. (PSB): Free Stock Analysis Report

Liberty Property Trust (LPT): Free Stock Analysis Report

MGM Growth Properties LLC (MGP): Free Stock Analysis Report

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