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Prologis CEO on Outlook for Industrial Real Estate

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    Prologis CEO Hamid Moghadam on the outlook for warehouse leasing.

  • Duration 4:08
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-- maintain yourself fat or shares or ProLogis falling after releasing its fourth quarter report the company.

Did beat street -- -- but it's 2013 outlook came up short.

Once again the outlook gets -- the stock is still up 20% over the past year -- Let's dig deeply into this company it's the world's largest owner of warehouse and distribution centers joining us now is have made -- market -- he has found -- -- chairman.

And CEO and at -- again these that got up from your perspective I think we just really wanna know house commercial real estate do.

Actually it's done very well we're in the industrial sector and I think -- 2013.

And beyond that is going to be our time in the sun so we're afraid feeling pretty good about our business.

You lease out millions tens of millions of square feet of space still warehousing and small businesses say you you can get got a pretty good idea of what's happening.

In the economy are there any trends that you're noticing.

Based on your warehouse and -- Sure I can probably comment on some geographic trends and some industry trends.

On the geographic side I would say on in the emerging markets Brazil Mexico and China.

Our are growing very fast and there is insatiable demand for our product in those -- markets.

And the mature economies the US is actually doing quite well.

And Japan is growing modestly.

Europe has some positive trends but not strong as you would expect.

Would respect I just nothing there what is positive trends -- Europe everybody's looking for glimmer of hope there.

You know it's really funny we've had positive absorption in the industrial space not just for us -- for the market the last two years.

Europe is in the midst of restructuring its supply chain.

As a way of reducing the cost structure of the companies that operate there and that's really good for our business because it generates demand.

For new warehouses and we're in a market leader there so -- -- it's been great for our business in the last 44 months.

A robust economy would even be better but I can ask for everything.

Well yeah I mean what else do you want have me.

Your your asking them a lot here what what -- taken to sort of that the real fibers of the fabric -- companies to the people really do understand.

You -- some deals with Amazon people think they're just ordering products in their flying in from somewhere -- fight him from.

Where houses and businesses that you actually own you've got Amazon properties in eight different markets all over the world.

You've just signed a new deal about people look at Amazon some of the -- that stock in particular how healthy does that business look.

Well I'm Amazon specifically they're great customer but there are either e-commerce players that are taken up a lot of warehouse space is up and -- You name it whether it's a bricks and mortar retailer or -- say it's -- on my pure online company and it's by the way.

A global phenomenon is not just the US.

Phenomenon -- all we're seeing this in Brazil we're seeing him in China we're seeing it in Japan and a big way.

So these companies basically use warehouses.

As -- analog for retail space and we're the largest provider -- warehouse space around the world we have 550 million square feet of this stuff.

And it pretty active development business that can support the business of these growing companies.

Rental rates are down at least some leases signed in the fourth quarter is that significant at all.

Not really because think back five years when we signed some of these leases that are expiring now.

That global financials -- crisis was just starting.

In the fourth quarter of 2008 there was really accelerating 2008 so those -- peak market rents that are now getting mark to market but that's the last bit of it.

Leases that we signed in 2000 and -- -- -- are below market and as soon as we get into 2013.

I think that trend will reverse itself.

How are you thank you very contrary to -- -- thanks for coming in the ProLogis Gerri thank you -- I mean obviously the Internet and people everybody buys stuff on it he's a real beneficiary of 500 million square feet all around the -- 22 countries this -- -- knows what's happening in the world coming -- play.

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