Prologis Inc. raised its full-year 2026 guidance for the second time, driven by record leasing activity and improved operating fundamentals for the quarter ended June 30, 2026. The logistics real estate investment trust reported Core Funds from Operations (Core FFO) of $1.63 per diluted share, exceeding the analyst consensus estimate of $1.54, while net earnings per diluted share stood at $1.13. Chief Executive Officer Daniel Letter stated that customer demand is broadening as logistics, digital infrastructure and energy needs increasingly intersect. Following the results, Truist Securities analyst Michael Lewis maintained a Buy rating on the stock and raised the price target to $162 from $154.

Operational Performance

Prologis signed over 67 million square feet of leases, a record level for the company. Owned & managed period end occupancy increased to 95.5%, a 20-basis point increase compared to March 31, 2026. The company delivered same-store NOI year-over-year growth of 6.4% on a net effective basis and 8.5% on a cash basis. Rent change on rollover exceeded 36% on a net effective basis.

Capital Deployment

During the quarter, Prologis started $1.6 billion of development across logistics and data centers, including a 260-megawatt build-to-suit campus. The company completed $1.8 billion of third-party acquisitions at an estimated discount to replacement cost of approximately 20%. Disposition activity totaled $800 million, and the company contributed $500 million of logistics real estate to Strategic Capital vehicles. The data center power pipeline expanded to 5.8 GW.

Balance Sheet

Total available liquidity was approximately $7.6 billion as of quarter-end. Debt-to-Adjusted EBITDA was 4.7x, and debt as a percentage of total market capitalization was 23.9%. The weighted average interest rate on the company's share of total debt was 3.3%, with a weighted average term of 7.9 years.

2026 Guidance

Prologis updated its 2026 guidance, raising the range for net earnings attributable to common stockholders to $4.40 to $4.55 per share from the previous range of $3.80 to $4.05. Core FFO guidance increased to $6.22 to $6.30 per share from the previous $6.07 to $6.23. Development starts guidance increased to $5.5 to $6.5 billion, and acquisitions guidance was raised to $1.5 to $2.0 billion.

AI Demand Outlook

Prologis identified artificial intelligence infrastructure as a new demand driver for its logistics business. The company estimates that every $1 trillion spent on data center capital expenditures could generate 30 million to 40 million square feet of incremental warehouse demand, as AI projects require extensive supply chain, manufacturing and logistics support. CFO Tim Arndt noted that this investment provides a durable multi-year source of growth.

Prologis believes constructive engagement offers the best path for the Board of SEGRO to maximise long-term value for shareholders and wider stakeholders. The firm highlights its superior platform and a significant data center opportunity, anchored by a 5.8GW power pipeline, as primary advantages in the proposed combination. Prologis asserts that these capabilities create benefits that SEGRO cannot independently replicate.

The strategic rationale centres on the structural constraints reflected in SEGRO's current public market valuation. Prologis contends that its platform addresses these limitations, positioning the combined entity for stronger performance. The firm maintains that a partnership would deliver the optimal outcome for all stakeholders involved.

Strategic Advantages

Prologis identifies four key factors supporting its case:

• Prologis brings both a superior platform and a larger data center opportunity.
• Prologis' platform creates advantages that cannot be replicated by SEGRO.
• SEGRO's public market valuation reflects its structural constraints.
• The strategic rationale is clear — constructive engagement creates the best outcome.

The 5.8GW power pipeline serves as a critical differentiator, underscoring the scale of Prologis' data center operations compared to SEGRO's existing capabilities.