ENVIRONMENTAL | page 9 of 19

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We also implemented waste diversion and potable water reduction strategies at various global projects and established a mechanism for tracking our progress on these initiatives during 2007. Additionally, we continue to work on increasing our use of recycled materials and are focused on understanding the recycled content of steel and concrete - two of the largest items used in warehouse construction. ProLogis has never been fined for non-compliance with environmental laws and regulations and due to the nature of our business, we have a very low risk of significant spills.

In March 2008, we announced an initiative with Southern California Edison (SCE) to provide rooftop space in one of our distribution parks for a solar panel installation pilot project. SCE will make the capital investment in the panels and harvest the energy for their customers' use in the region, while ProLogis will install the panels and earn "roof rent" from SCE. We anticipate the first installation will be made late in 2008 and will provide an update on the progress of this initiative in future reports.

Finally, in order to improve our fluency in green construction practices, we required our North American construction management team to undergo LEED accreditation training. So far, 25 ProLogis employees have achieved LEED AP status.

ENERGY-EFFICIENT LIGHTING
In 2006, ProLogis embarked on a lighting program to install or upgrade the lighting systems in our North American portfolio to energy-efficient T5 and T8 fluorescent lighting systems, which can cut electricity usage by 30 to 40%. To date, we have installed more than 14.1 million square feet of high-efficiency lighting, which translates into roughly 15.8 million kWh saved annually compared with standard systems. That is enough to power 1,489 U.S. homes for a year. In terms of carbon, the combined installations avoid approximately 9,694 metric tons of CO² from being emitted annually.

WORKING WITH SUPPLIERS
Through the building components and products we purchase, we enhance the environmental attributes of our warehouses. In 2007, we met with suppliers to learn more about their sustainable offerings in order to incorporate such products into our purchasing practices. One outcome included testing environmentally friendly paints and carpets during initial warehouse construction and tenant improvements. Based on positive feedback, we plan to incorporate environmentally preferred products into our standard offering for 2008.

Lowest Carbon Footprint Warehouse in Europe

ProLogis Park Pineham In October 2007, we completed construction of a U.K. distribution warehouse for Sainsbury's, one of the U.K.'s leading retailers, that has the lowest carbon footprint of any such facility in Europe. The award-winning, 624,000-square-foot facility at ProLogis Park Pineham, Northampton, sets new standards for sustainable development with an ultra-low carbon design that exceeds U.K. building regulations by 40%. A carbon management system recorded the carbon footprint of every aspect of the construction process, including emissions associated with the production of raw materials and construction components, carbon associated with transport to the site and energy used on site. The carbon footprint was further reduced through a waste management plan to reduce and recycle construction waste. The building also has significantly reduced operational carbon emissions. A combined heat and power plant drives the refrigeration system, warms rainwater harvested from the roof and generates electricity for use on the site. Air tightness levels exceed U.K. regulations by 75%, while a solar wall and wall-mounted photovoltaic panels generate renewable electricity and provide passive warehouse heating. Carbon credits were purchased to offset the embodied carbon by 110%, creating a net reduction in emissions equivalent to that of more than 440 homes.

ENVIRONMENTAL | page 9 of 19

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