- Prologis is considering launching its first co-investment vehicle focused on data centers.
- Data centers are projected to comprise 40% of the company’s $4B–$5B new development pipeline for 2026.
- Prologis has identified 3,000 acres of its land bank as suitable for data centers, with significant power secured or in late-stage procurement.
- Data center projects could generate higher margins for Prologis compared with warehousing assets.
Prologis Considers Data Center Fund
Prologis, the global industrial real estate leader, is exploring a co-investment vehicle dedicated to data centers, reports The WSJ. The fund would mark the company’s first expansion beyond its core logistics business, targeting demand driven by AI and cloud computing growth.
The company is actively discussing the opportunity with investors and expects a decision within the next few months. If launched, the vehicle would rely on Prologis’s established private-capital model to scale efficiently.
Investor Momentum Builds
Investor interest in data centers remains strong, according to CFO Tim Arndt, as institutions seek exposure to the asset class. Prologis’s experience developing and selling data centers supports its push into the sector.
The company also benefits from extensive land holdings and power access across its global portfolio. This year, Prologis plans to break ground on $4B–$5B in new developments, with roughly 40% allocated to data centers.
That figure represents a sharp increase from last year, when data centers made up only 10% of development starts.
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Why It Matters
Data centers have become a core strategic focus as Prologis reviews its 14,000-acre global land bank. About 3,000 acres meet the technical requirements for data center development.
Those sites leverage the company’s scale and power procurement capabilities. Prologis has secured 1.8 gigawatts of power globally, with another 3.9 gigawatts in late-stage procurement. This focus aligns with the company’s broader push into AI-driven real estate and energy-related infrastructure, as it looks beyond traditional logistics assets.
Returns also favor the shift. Data center projects could generate margins between 25% and 50%, compared with 15% to 20% for warehouse developments.
What’s Next
If Prologis moves forward, the fund would create a new capital channel while limiting balance-sheet risk. The structure would allow the company to scale exposure to a high-growth real estate segment.
As AI and cloud computing accelerate demand, Prologis’s land, power access, and capital expertise create a clear advantage. Together, those factors position the company to capture meaningful market share.
