The logistics sector remained resilient during the period with robust take-up levels and declining vacancy thanks to tight supply and sustained and growing demand.

Key takeaways:

•    The second quarter played out better than our expectations in terms of both our results for the period and outlook for 2020 and beyond. Leasing activity in our portfolio, market fundamentals, valuations and rent collections are all trending favourably and Prologis globally has adjusted its guidance, based on a more positive outlook for the second half of 2020;

•    Vacancy level in Europe declined further from 4% to 3.6% reflecting an uptick in demand from companies active in ecommerce, pharma and food & beverage;

•    Rents eased by -0.6% in Q2, a softening driven by supply and is unrelated to Covid-19.

Throughout the second quarter Prologis Europe:

•    continued to work with its customers to support them and the wider communities through the pandemic via ongoing initiatives including a 24/7 helpdesk provided by our maintenance technicians, spaces for good, provide meals and other pandemic necessities.  See also our other social responsibility initiatives

•    extended its Cool Earth to all of Europe as part of our goal to strengthen our commitment to reducing carbon emissions and mitigating the impact of our operations globally;  

•    provided a running narrative on the impact of COVID-19 on supply chains and the importance of logistics real estate via a series of  COVID-19 Research Reports

Operating Performance Prologis Europe as of June 30, 2020:
•    Total portfolio: 18.4 million square meters*

•    Period-end occupancy: 96.6% as compared to 96.0% in Q1, 2020, with the majority of markets reporting stability

•    Total leasing activity: 826,000 square meters:
      o    170,000 square metres of new leases
      o    657,000 square metres of lease renewals

•    Year to date 2020 leasing activity was 1.59 million square meters:
      o    293,000 square meters of new leases
      o    1.3 million square metres of lease renewals
*includes operating, development, held for sale, other and VAA/VAC

Capital Deployment Prologis Europe – Second Quarter 2020 :

•    There were no new development starts in Q2 reflecting market sentiment due to the COVID-19 pandemic;
Acquisitions & Dispositions:

•    Four land parcels were acquired with a total land area of 679,000 square meters in the UK, Germany, Czech Republic and Hungary;

•    One sale of a 13,300 square meter building in Sweden took place.
Central Europe
Prologis in Central Europe (Poland, Czech Republic, Slovakia and Hungary), ended the second quarter of 2020 with a total portfolio of 4.27 million square meters. Occupancy stood at high 95.9%, compared to 95.5% in the first quarter of 2020.

Operating Activity as of June 30, 2020:

•       414,500 square meters of leases signed throughout the quarter;

Investment Activity – Second Quarter 2020:  

•       4 buildings completed with a total area of 135,500 square meters, 84.5% leased;

•       13 hectares of land acquired for two new facilities with a potential NRA of 60,000 square meters at Prologis Park Budapest-Sziget II.