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Prologis records occupancy of 92.6 per cent at end of Q2

Prologis ended the second quarter of the year with occupancy of 92.6 per cent, an increase of 30 basis points over the prior quarter.

Prologis Europe leased 820,000 square metres across its 13.7 million square metre portfolio. Demand continues to be driven by reconfiguration of the supply chain, trade and e-commerce.
 
Notable new leasing activity in the second quarter included:
 
•             26,500 square metres at Prologis Park Budapest-Sziget, Hungary, to DB Schenker;
•             20,600 square metres at Prologis Park Wrocław V, Poland, to Hi Logistics; and
•             11,000 square metres at Schiphol-Rijk, Amsterdam, to Jabil Global Services Netherlands.
 
Net effective rental growth continued in the second quarter in markets with high occupancy, particularly the UK and Northern Europe.
 
The strongest markets in the second quarter for occupier demand were: Gothenburg, Munich, south Netherlands, Lyon, and Le Havre in Northern Europe; Prague, Poznan, Wroclaw, and Bratislava in Central & Eastern Europe; and the Midlands, London and south east England in the UK.
 
Supply of modern Class-A distribution facilities remains low across all European markets. In the second quarter, Prologis Europe initiated six developments, totalling 81,300 square metres, of which five are speculative and one build-to-suit, including: 

 
•             29,900 square metres of speculative space at Prague Airport DC1;
•             23,700 square metres of speculative space at Bratislava DC7B/C (40 per cent pre-let);
•             9,200 square metres of speculative space at Heathrow DC6; and a
•             7,500 square metre build-to-suit facility for DB Schenker at Budapest Sziget DC6.
 
In the second quarter, Prologis Europe acquired three facilities totalling 73,740 square metres in the Netherlands, the UK and France.
 
Prologis disposed of one industrial facility totalling 3,100 square metres in France and 40 acres of non-core land in the UK and France.
 
“Supported by increasing confidence, occupier markets continued their recovery, albeit at an uneven pace,” says Philip Dunne, president, Prologis Europe. “These improving operating fundamentals have led to an increase in development activity in select markets and we are seeing capitalisation rates compressing for the fifth consecutive quarter.”

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