Full-year occupancy guidance raised after strong Q1 leasing
Prologis delivered a strong Q1 with record leasing, driven by data center supplier demand, and raised 2026 core FFO guidance. The company is expanding into data centers and energy, and is using third-party capital to fund growth. Record leasing of 64 million sq ft in Q1 2026 with pipeline at all-time high.
Buzzberg readFull-year occupancy guidance raised after strong Q1 leasingPrologis delivered a strong Q1 with record leasing, driven by data center supplier demand, and raised 2026 core FFO guidance. The company is expanding into data centers and energy, and is using third-party capital to fund growth. Record leasing of 64 million sq ft in Q1 2026 with pipeline at all-time high.Read full analysisCollapse analysis
Prologis delivered a strong Q1 with record leasing, driven by data center supplier demand, and raised 2026 core FFO guidance. The company is expanding into data centers and energy, and is using third-party capital to fund growth. Record leasing of 64 million sq ft in Q1 2026 with pipeline at all-time high.
Data center suppliers now account for ~10% of new leasing, up from <5% a year ago.
Construction starts guided higher to $4.5-5.5B, with 40% allocated to data center build-to-suits.
Power pipeline of 5.6 GW (secured/advanced) provides a massive investment and value-creation opportunity.
Revenue$2.2977B
+2% QoQ
EPS$1.05
-27% QoQ
Gross margin10.12%
reported
Op margin35.99%
reported
What changed this quarter
01
Guidance
Full-year occupancy guidance raised after strong Q1 leasing
Guidance tone
02
Demand
Leasing pipeline reached new highs after record quarter
Management highlighted record leasing, resilient demand, and raised guidance despite geopolitical uncertainty, projecting continued momentum through 2026.
03
Data Centers
Data center pipeline of 1.3GW under LOI
Data center suppliers now account for ~10% of new leasing, up from <5% a year ago.
04
Supply
Market rents rose for first time in two and a half years
Construction starts guided higher to $4.5-5.5B, with 40% allocated to data center build-to-suits.
Demand & capex
Demand
Bookings & conversion
Leasing pipeline reached new highs after record quarter. Management highlighted record leasing, resilient demand, and raised guidance despite geopolitical uncertainty, projecting continued momentum through 2026.
Capex
Investment and capacity
Management raised full-year development starts to $4.5–5.5 billion with roughly 40% allocated to data center build-to-suits. They emphasized strong customer interest in power sites and a pipeline that could support over $15 billion of investment at a Power Shell format. Acquisitions remain at $1–1.5 billion while strategic capital vehicles are expanding to fund deployment.
Tone · Upbeat
Management highlighted record leasing, resilient demand, and raised guidance despite geopolitical uncertainty, projecting continued momentum through 2026.
Supply-chain alpha
A1
Data center suppliers are becoming a significant new source of logistics demand, representing about 10% of new leasing, up from less than 5% a year ago.
“It has gone from, say, less than 5% of new leasing a year ago to now 10% of new leasing, and it's an even greater share of the forward-looking pipeline.”
Large-format industrial buildings (500,000 sq ft+) are nearly sold out at 98% leased globally, which is driving rent growth in that segment.
“Anything over, call it large format, 500,000 square feet or above, we're nearly sold out. We're 98% leased across the globe at that size. So you'll start seeing rent growth there, certainly.”
Prologis is carrying a land and power pipeline of 5.6 GW, which could fuel over $15 billion in investment, not counting turnkey opportunities.
“Assuming a PowerShell format at $3 million per megawatt, our current pipeline could provide well over $15 billion of investment and multiples of that in a turnkey format”
Southern California remains a laggard, but Prologis views its supply constraints and large consumer base (24 million) as positives for a 2-3 quarter lagged recovery.
“It's a $2 trillion economy down there. And it's just getting more and more difficult to build down there. So the supply backdrop is really shaping up for that market quite well.”