Prologis Infuses More Capital Into 2 Major Funds, Clears Redemption Requests

Prologis warehouse building

Prologis said Tuesday it has committed $500M into two of its major strategic capital funds to further invest in industrial assets across the globe.

Prologis U.S. Logistics Fund and Prologis European Logistics Fund committed $250M and €250M, respectively. At the end of the second quarter, USLF’s portfolio totaled 123M SF and PELF’s spanned over 161M SF.

The San Francisco-based REIT also reported clearing all redemption requests for the two funds through the second quarter, a notable announcement considering the redemption limitations many REITs have implemented over the last few quarters as withdrawal requests have spiked.

“Industrial real estate continues to be an attractive place for capital investment, especially USLF and PELF's well-located and high-quality portfolios,” Karsten Kallevig, managing director of Global Strategic Capital at Prologis, said in a statement. “Now that external valuations have caught up with the market, we view this as a good time to invest.”

In June, the firm bought $3.1B in industrial properties from Blackstone.

Last month, Prologis CEO Hamid Moghadam said the industrial market is getting back to a pre-pandemic normal.

While net absorption for U.S. industrial real estate is down from Q1’s 71.4M SF to 44.9M SF, the pace of demand is historically healthy, mirroring activity before the pandemic, according to Cushman & Wakefield.

Prologis owns over 1.2B SF of logistics real estate in 19 countries and earned $1.65B in rental revenues during Q2, up 51% from last year. Total revenue for the REIT’s portfolio is also up, clocking in at $2.45B, and occupancy sat at 97.5%.

The industrial sector is experiencing a rapid growth in rent prices with an 8.9% increase year-over-year, per the National Association of Realtors. Logistics rent growth has increased even faster at 10.1% year-over-year.

Prologis’ net effective rent grew 91.7% year-over-year in Q2 across its U.S. portfolio.

CORRECTION, AUG. 30, 12:39 P.M. ET: Prologis committed its own money into the funds rather than raising new money from outside sources. The story has been updated. 

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