NEW YORK (
, a pair of
real estate investment trusts due to merge later this quarter, reported improved quarterly results, boosted by stronger demand for warehouse and distribution space.
Industrial real estate interest had grown in recent months as global economies continue to recover, lifting demand for modern storage spaces for a range of goods and products.
Occupancies at AMB and ProLogis properties increased in the recent quarter, but rents continued to slide though at a slower rate than previously reported.
Still, investor enthusiasm over the pair's results was tempered Wednesday as excitement about AMB and ProLogis merging was likely already priced into the stocks.
AMB shares fell 1.5% to $35.57 Wednesday morning while ProLogis lost 1.6% to $15.83.
"We think the stocks have gotten well ahead of the story," said Cowen analyst James Sullivan.
Also, ProLogis CEO Walter Rakowich commented that while demand has improved, the pace of the rebound eased in the first quarter this year as higher energy costs, concerns over sovereign debt issues, global military actions and the Japan earthquake tempered demand.
For the recent quarter, AMB booked funds from operations of $56.1 million, or 32 cents per share, up 25.8% from year-earlier results of $44.6 million, or 29 cents per share. The line item matched analysts' expectations.
Funds from operations, or FFO, is a performance figure generally used by REITs to define cash flow from operations and removes the profit-reducing effect depreciation has on earnings.
ProLogis posted quarterly FFO of $74.4 million, or 13 cents per share, up 42.3% from $52.3 million, or 11 cents a share, booked in the year-earlier quarter. Despite the surge, results missed expectations by two cents per share.
Both AMB and ProLogis incurred charges in the quarter related to damages at their properties in Japan, a result of the catastrophic earthquake and tsunami that hit the country in early March.
AMB booked damages of $2.7 million related to its Japan portfolio, while ProLogis incurred $7 million in damages.
-- Written by Miriam Marcus Reimer in New York.
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