Prologis (PLD) BofA NY Global Real Estate Conference 2026 summary

Operational performance and leasing trends

• Leasing volumes and occupancies have shown sustained positive trends, with record quarterly lease signings in the 60–65 million square foot range and a robust pipeline exceeding 100 million square feet in new inquiries.

• About 10% of new leasing is driven by data center build-out, expected to provide long-term incremental demand.

• Net absorption rebounded to 66 million square feet in Q2, aligning with healthy annualized expectations, after a period of low absorption due to post-COVID right-sizing.

• Market rent growth is returning, with a 17% lease mark-to-market gap and an additional 20% gap to replacement cost rents, suggesting mid-single digit annual rent growth for several years.

• Strongest markets include the Sun Belt, Southeast, Texas, and select central U.S. cities, with SoCal inflecting positively; weaker markets are Seattle, Central Pennsylvania, and China.

Strategic initiatives and transactions

• Development activity, especially build-to-suit, remains strong and sustainable, with about 35% of development starts expected to be build-to-suit going forward.

• The SEGRO acquisition in Europe is progressing, expected to close in the first half of next year, and is seen as highly complementary.

• Transaction markets are active, with high-quality portfolios trading at low cap rates and IRRs in the low to mid sevens; short-term rate moves may affect pricing, but long-term inflation is expected to drive values.

• Appetite for global expansion remains, including in stressed markets like China, with ongoing evaluation of acquisition opportunities.

Data center and energy strategy

• Data centers represent a major growth area, with 5.8 GW of power secured or in advanced stages and a dedicated team of 75; only 1.6 GW is currently secured, with the rest in progress.

• The approach is to develop data centers in a risk-mitigated way, focusing on capital recycling and only commencing projects with high-credit tenants.

• Funding is primarily through capital recycling, with private equity frameworks established for larger opportunities.

• Solar power generation and storage have reached 1.4 GW, covering about 8% of the portfolio, with significant growth potential, especially in the U.S.