2015 SEPTEMBER 16, Bank of America Merrill Lynch Global Real - PowerPoint PPT Presentation

2015 SEPTEMBER 16, Bank of America Merrill Lynch Global Real Estate Conference New York, NY

Prologis Overview 3 Long-Term Global Trends 7 Business Lines 15 Capital Structure & Financial Strength 24 Benchmarking 28 Acquisition of KTR 33 Key Takeaways 37 Notes and Definitions 38 Contents

Prologis Overview

World’s Largest Industrial Property Company Prologis Park Toluca 4, Mexico City • Leading global owner, operator and developer of industrial real estate with 670 million square feet of space • $56.0 billion (1) in assets under management, across 21 countries and four continents • $36.6 billion (1) in strategic capital assets ($13.5 billion Prologis’ share) in 11 geographically diverse co- investments (2) • $3.7 billion global development pipeline and $1.8 billion land bank to fuel future starts • Long history of industry-leading corporate governance and transparency Note: Data as of June 30, 2015 1. Based on fair market value of investment management co-investment ventures and estimated investment capacity 4 2. The co-investment venture count excludes Prologis DFS Fund I due to the size of the venture

Platform Covers Countries Representing ~70% of Global GDP (1) AMERICAS EUROPE ASIA 2,412 Buildings 685 Buildings 75 Buildings Total Portfolio (2) : 445 MSF / 41 MSM Total Portfolio (2) : 174 MSF / 16 MSM Total Portfolio (2) : 51 MSF / 5 MSM (74% PLD Share) (46% PLD Share) (36% PLD Share) Development TEI: $1,577M Development TEI : $580M Development TEI: $1,561M (85% PLD Share) (91% PLD Share) (66% PLD Share) GLOBAL Total Portfolio (2) Development TEI 3,172 Buildings $3,718M (PLD Share: 78%) 670 MSF / 62 MSM (PLD Share: 64%) Note: Data as of June 30, 2015 1. Source: International Monetary Fund 5 2. Comprises Prologis’ operating, development and other portfolio

Leading by Example #1 governance ranking for 12 consecutive years among U.S. REITs Named as one of the world’s most admired companies Global leader in sustainability and corporate responsibility practices Recognized globally for design, stewardship and leadership Wiegmann Distribution Center, Germany 6

Long-Term Global Trends

The Changing Landscape of Industrial Real Estate  Sophisticated investors expanded investment in sector  Increased globalization,  Increased capital flows consumption and and demand has driven urbanization cap rates to historic lows which attracted supply  E-commerce is positive and limited rental growth structural driver of in prior cycle demand for logistics real estate  Constrained financing due to Basel III regulations  Private developers that went bankrupt in prior cycle have not reemerged  Increasingly complex due to entitlements & zoning and increased scale 8

Macro & Mega Trends Driving Demand for Logistics Trade as a % of GDP, U.S. Consumption as a % of GDP, U.S. Growth in Urban Population Trade continues to grow at a multiple of GDP Increasing affluence drives consumption, Customers locating within/adjacent to requiring new facilities population centers; higher barriers to entry imports (bil.) 14% 70% 10.0 80% 69% 12% 9.0 70% 68% 8.0 60% 10% 67% 7.0 50% 66% 6.0 8% 5.0 40% 65% 6% 4.0 64% 30% 3.0 4% 63% 20% 2.0 62% 2% 10% 1.0 61% 0.0 0% 0% 60% 1980 1985 1990 1995 2000 2005 2010 1980 1985 1990 1995 2000 2005 2010 Rural Urban % Urban Source: U.S. Bureau of Economic Analysis, Prologis Research Source: U.S. Bureau of Economic Analysis, Prologis Research Source: United Nations Increased globalization, consumption and urbanization fueling logistics demand 9

Dearth of Class-A Stock 8.0% Total Industrial Stock 5,000 MSF Class-A 5% Forecasted GDP Growth 2014 - 2016 230 MSF 6.0% CHINA UNITED STATES MEXICO Total Industrial Stock 550 MSF 4.0% Total Industrial Stock Class-A 50% 13,000 MSF 275 MSF EUROPE JAPAN 10% Total Industrial Stock Class-A 2.0% 9,000 MSF 100 MSF 30% BRAZIL Total Industrial Stock Total Industrial Stock 5,000 MSF 1,100 MSF 15% 3% Class-A Class-A 165 MSF 0.0% 4,000 MSF Class-A 1,300 MSF 10 1. Source: Prologis Research, CBRE-EA, JLL, DTZ, International Monetary Fund, World Economic Outlook

E-Commerce – A New Driver of Demand Global E-Commerce Sales Volume & Share • E-commerce is positive structural ($, billions) (% of retail sales) driver of logistics real estate 1,200 8 FORECAST demand 7 1,000 6 • Accounts for more than 10% of 800 5 new leasing, up from less than 600 4 3 5% four years ago 400 2 200 1 • More intensive user of logistics 0 0 facilities and requires more space 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E than comparable non-e-commerce users due to: E-Commerce Share by Region • High inventory levels (% of retail sales) • Broader product variety 15 • Outbound shipping direct to 12 consumers 9 • Reverse logistics (returns) 6 • E-commerce facilities are 2/3 less 3 efficient, driving incremental 0 Western CEE U.S. Japan China Brazil demand by a factor of 3x Europe 2005 2014 2018E 11 Source: Goldman Sachs, Prologis Research

U.S. Logistics Real Estate Fundamentals Logistics Market Fundamentals, U.S. Supply Pipeline vs. Demand by Market (sf, in millions) (vacancy rate, %) (sf in millions and % (1) ) 0 5 10 15 20 25 30 400 12 SW SoCal (84%) 300 SFBA/CV (20%) NW 10 Seattle (131%) Indianapolis (70%) 200 8 Central Chicago (54%) Dallas (86%) 100 Houston (48%) 6 SoFL (36%) 0 Atlanta (94%) 4 C&E PA (56%) (100) East Balt/Wash (57%) 2 NJ/NY (18%) (200) Toronto (161%) (300) 0 Net Absorption Pipeline 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E Source: CBRE, JLL, Cushman & Wakefield, Colliers, Prologis Research 1. The percentages within the axis labels are market-level development pipeline as a proportion Completions Net Absorption Vacancy Rate of trailing net absorption Source: CBRE (historical), Prologis Research (forecast) 2016 Supply/Demand Forecast : • Net Absorption: 225 MSF 2015 YE Vacancy: 5.9% • Supply: 215 MSF 2016 YE Vacancy: 5.8% 12

Recovery Beginning to Drive Cost U.S. Replacement Cost Distribution of Replacement Cost ($ per square foot, inclusive of developer profit) (% of total cost, estimate in U.S.) 120 Profit, 100 Developer Profit, Profit, Land General General Contractors 80 Contractors & & Subcontractors Subcontractors 60 Material Labor 40 20 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Replacement Cost Inflation Trend Source: Turner Construction, US. Bureau of Labor Statistics, Prologis Research Source: Turner Construction, US. Bureau of Labor Statistics, Prologis Research 13

Europe Logistics Real Estate Fundamentals Logistics Market Fundamentals, Europe Supply Pipeline vs. Demand by Market (sf, in millions) (vacancy rate, %) (sf, in millions and % (1) ) 100 14 (1) 0 1 2 3 4 5 6 London (137%) UK 82 12 Midlands (57%) 10.5 msf 75 70 Frankfurt (89%) 10 66 63 NE Amsterdam (133%) 8 Southern Netherlands (75%) 51 48 50 Paris (n/a) 43 40 6 SE Lyon (0%) Madrid (123%) 24 4 25 20 Warsaw (27%) 2 CEE Wroclaw (16%) Prague (97%) 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E Speculative BTS Net Absorption Source: CBRE, JLL, DTZ, Gerald Eve, Prologis Research 1. The percentages within the axis labels are market-level development pipeline as a Completions (L) Net Absorption (L) Vacancy (R) proportion of trailing net absorption Source: CBRE, JLL, DTZ, Gerald Eve, Prologis Research Note: Based on 48 largest European logistics markets 2016 Supply/Demand Forecast : • Net Absorption: 70 MSF 2015 YE Vacancy: 6.2% • Supply: 63 MSF 2016 YE Vacancy: 5.6% 14

Business Lines

Prologis’ Global Platform – Drivers of Core FFO OPERATIONS: Collect Rent ~90% • $2.9B of annualized Net Operating Income (1) • 20-25% rent growth for 2014 – 2017 • Diversified customer base STRATEGIC CAPITAL: Generate Fees Impact ~10% • $23.1B of third-party capital on Core • Over $200M of revenue from perpetual life vehicles FFO • Opportunities to earn promotes for outperformance DEVELOPMENT: Create Value 0% • $2.5B of annual development • $300M-$400M of annual value creation Note: Development gains are a significant • Stabilizations contribute approximately $0.15 in annual driver of AFFO NOI to operating portfolio 16 1. Q2 owned and managed NOI annualized and adjusted for full quarter of KTR acquisition

Net Operating Income (1) $2.9B 3 rd Party Share $1.7B $1.7B Asia 4% Europe 17% Americas 79% Prologis' Share Owned & Managed Prologis' Share Americas Drive Prologis’ Share of NOI 17 1. Q2 NOI annualized and adjusted for full quarter of KTR acquisition