Dear Fellow Shareholders:

When my partners and I started in this business more than four decades ago, the logistics industry was highly transactional, driven primarily by merchant builders who moved from one project to the next and landlords who had little interest in building enduring customer relationships. We had a different vision.

We set our sights on being a long-term partner to our customers and the communities where we do business. We knew investing in innovation and people would be key to long-term growth and success. History has proven us right.

Most recently, the COVID pandemic spurred a titanic shift in the way we all live and work. It created unprecedented demand and choked the world's supply chain. This historic event transformed global commerce across every dimension. Today, there is a new emphasis on building resiliency, radically shifting the way businesses manage their supply chains.

Adjusting to a New Normal

As a global company, we are acutely aware of external macroeconomic dynamics. However, we believe the forces of demand for our business are somewhat decoupled from the broader economy. This is playing out in two ways.

The first is demand from ecommerce. As the world settles into a new normal post-COVID, ecommerce continues to drive significant and diverse growth in demand for space. Second, we see customers continue to expand their operations for a “just in case” approach to inventory, which further feeds demand.

Making Customer Centricity Real

As a logistics solutions company, we operate from a foundation of owning and operating the best logistics real estate in the world. We have a land bank that, once completely built out, will add another $39 billion of assets to our holdings. When it makes sense, we expand our portfolio through acquisitions, as we did this past year with Duke Realty, which brought $23 billion of high-quality properties in key U.S. markets.

At the same time, we are hard at work to deliver value beyond our real estate through our unique Prologis Essentials platform. This suite of solutions is designed entirely to help our customers tackle some of today’s most critical supply challenges in their operations, energy, mobility and workforce.

We also look for ways to deepen our customers’ and other stakeholders’ understanding of the supply chain—where it is today and what to expect in the future. We do that through Prologis Ventures, our industry-leading research and our annual GROUNDBREAKERS forum.

Greening the Supply Chain

As we look toward the supply chain of the future, we’re actively supporting our customers’ transition to clean energy and sustainable operations. We have a commitment to achieve net zero across our supply chain by 2040. We purposely set an ambitious goal to continue to be the leader across the industry and help inspire other companies to follow suit. We’ve made a serious commitment with science-based targets to monitor our progress.

An Engaged Local Partner

We are always focused on being a good neighbor in the communities where we operate. Our teams are active in a wide variety of local businesses and nonprofit organizations. Each year, we step away from our regular day jobs and, as a company, volunteer locally through Prologis IMPACT Day. Throughout the year, we encourage our employees to give back through donation-matching programs and paid time off for volunteer activities. We also offer space to local nonprofits and emergency relief agencies when the need arises.

We partner with and serve local communities in unique ways. We’re particularly proud of our community energy partnerships, where we are committed to help serve disadvantaged populations by providing fixed-rate clean energy for local neighborhoods from the solar generated on our rooftops.

Leading for the Future

We are fortunate to sit at the epicenter of a supply chain that has 2.8% of the world’s GDP passing through a Prologis warehouse. More than 1.1 million people work under our roofs, and Prologis works with some of the biggest brands on the planet—but also helps small and medium companies deliver the products people need and want each day. We are excited about our future growth potential, which is driven by our customer relationships, the quality of our portfolio and our suite of Essentials offerings.

What can our investors expect in 2023? We will remain disciplined through uncertain times knowing we have the strong balance sheet to seize opportunities when they arise. We’re projecting nearly 10% Core Funds from Operations growth, supported by the embedded growth of our lease activity, recurring fees from our Strategic Capital platform, the development of our land bank and our expanded Essentials platform. This growth comes on the heels of an impressive 14% annual growth since 2019, 550 basis points of annual outperformance compared to our 2019 Investor Day outlook.

We’ll continue to attract and retain the best talent, maintaining a focus on fostering a truly diverse and inclusive workforce. Our succession planning continues as we welcomed Tim Arndt as our new CFO in 2022, and Dan Letter took the reins as president in January 2023.

I would be remiss if I didn’t acknowledge the retirement of Bill Zollars from our board, a long-standing member who has served our company and investors through his deep business and logistics experience. We’re grateful for Bill’s unwavering commitment and service.

Thank you for your continued interest and investment in our company. Every day, we work to break new ground, find new ways to support our customers and stay ahead of what’s next.

All the best,

Hamid Signature
Park Grande, Building


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