Tim Arndt
Chief Financial Officer at Prologis
Thanks, Tracy. Good morning everybody and thank you for joining our call. The strong performance we realized through 2021 has continued into the New Year. Today as the production and distribution of goods continue to be disrupted, our customers find themselves struggling to simply keep up rather than focus on optimizing for resilience. This morning, we released our first quarter results, which exceeded our expectations across the board. Core FFO was $1.09 per share, ahead of our forecast, rent change on rollover was 37% on a net effective basis and was led by the US at 42%, notably, our Southern California and New York, New Jersey portfolios realized 86% and 67% rent change during the quarter respectively.
We ended the quarter at 97.4% occupancy, holding average occupancy flat to the fourth quarter of 2021, counter to the typical first quarter decline. These operating results drove cash same-store NOI growth to a record 8.7%, as we've been highlighting, the positive news and market rent is adding to our lease mark-to-market now at 47%. This equates to $1.6 billion of annual NOI as leases roll-to-market or over $2 per share of earnings that will drop to the bottom line even with no additional rent growth.
Given our market rent forecast and expected rent change, the lease mark-to-market could exceed 50% by year-end. We started over $1 billion in new development during the quarter across 32 projects in 16 markets which are expected to generate over $400 million in value creation, to build-out potential of our land bank now stands at $28 billion or approximately 200 million square feet. Most importantly, the balance sheet remains in excellent shape. Our debt-to-market cap is very low at 14%. We have nearly $7 billion of liquidity and over $18 billion of investment capacity for our largest and our open-ended funds.
Turning to our markets. Vacancy is at all time lows in most of our geographies. During the quarter, we signed 60 million square feet of leases and issued proposals on 90 million square feet and customers continue to compete for the little space that remains. Supply chains have yet to return to normal as measured by in-stock rates, shipment lead times and active dialog with our customers. While the flow of goods has improved, the inventory to sales ratio remains more than 10% below pre-pandemic levels. Inventories need to not only make up for this 10% to build an incremental 10% in safety stock and even if retail sales declined 5% as consumers shift their spending to experiences versus goods, we project that the market will still require an incremental 800 million square feet of space in the US alone.
As for supply, we are reducing our deliveries forecast for the year to 375 million square feet, as developer struggle to deliver on time due to the lack of materials and labor, a condition we expect to continue throughout the year. Because the supply story can become nuanced, we believe the best way to understand it is by comparing current vacancy in the market, including the development pipeline to trailing net absorption. We are calling this true months of supply or TMS and historically in our 30 US markets, the average number of true months to absorb this view of vacancy has been 36 during expansionary periods. Today, that figure is 16 months less than half.
By contrast, we analyze supply in the next 20 non-Prologis markets and see approximately 30 true months of supply. Our research team will be releasing a paper further detailing this unique perspective next month. This leads us to vacancy where we forecast rates to remain at record lows in our US and global markets, upholding the strong environment for continued rent growth.
During the quarter, market rents in the US grew by 8.5% and 6.5% globally. Given this pace and our outlook on demand, we're revising our annual rent growth forecast to 22% in the US and 20% globally in line with 2021. This rent growth was the main driver of value increases during the quarter which measured 9.5% globally. The uplift in Europe was a record 6.3% with strong appreciation across all markets, while the US increased 10.3% during the quarter following the significant 42% increase in 2021.
Still, while logistics markets remained strong, there are a number of macro headlines that we're monitoring. We are closely watching the events in Ukraine and the impact it's having on our colleagues and operations. So far we haven't seen any impact on our business and as we've highlighted in the past, these disruptive events often have the effect of increasing demand for warehouse space. Prologis and our employees have been contributing to Refugee Assistance efforts including providing space to local nonprofits under our space for good program and staying close to our colleagues personally affected by the conflict.
We are also watching both interest rates and inflation, on interest rates we have been well ahead of refinancing those for some time, addressing substantially all of our debt maturities through 2026 and taking advantage of low interest rates. Today, our weighted average interest rate is 1.7%, which has an average of 10 years remaining. And as far as inflation, we operate over 1 billion square feet of real estate where we find replacement costs rising at multiples of inflation. While rents have been increasing from secular tailwinds for some time, inflation will create a pricing umbrella for even further rent growth.
Taking these macro conditions and our strong first quarter performance into consideration, we have raised our 2022 guidance as follows. We are increasing the low end of our average occupancy forecast to a new range of 96.75% to 97.50%. We expect the rent change on rollover to increase throughout the year, driving net effective same-store growth to a range between 6.25% and 7% and cash same-store growth to a range between 7.25% and 8%.
Given the increase in asset values in Europe and our PELF venture, we are increasing our net promote guidance to $460 million, most of which is occurring in the third quarter and we are also increasing strategic capital revenues excluding promotes to a range of $550 million to $565 million, combined our strategic capital business will generate over $1 billion in revenue this year.
We are maintaining our guidance range for acquisitions of $700 million to $1.2 billion, as well as our development starts range of $4.5 billion to $5 billion. While we often increase or narrow deployment guidance as the quarters progress and notwithstanding the strong demand we see across our markets, we've elected to maintain our starts guidance recognizing certain factors that are outside of our control, such as labor availability. We are increasing our disposition guidance by $400 million reflective of both values and the strong selling environment. We expect to generate $1.7 billion of retained cash flow after dividends, an impressive amount given the 25% dividend increase we announced during the quarter.
Overall, we've increased the midpoint of our core FFO guidance by $0.08 to a range of $5.10 to $5.16 per share, core FFO excluding will range from $4.50 to $4.56 per share, representing 11% growth from 2021 at the midpoint and driven by our same-store increase. Over the last few quarters in outreach we've had with analysts and investors, we've reiterated what we hope is a clear picture of our differentiators. It starts with a customer first mindset, the unique approach in this sector and we found great opportunity in our scale and our own beginning to realize its potential.
For example, our procurement capabilities continue to be a significant advantage as we have secured both materials and pricing of various components, extending deeper into the products needed to fully stabilize our projects. We estimate that our procurement efforts have allowed us to deliver projects four to eight weeks ahead of our competition and at 7% to 8% lower costs. In our essentials business, we're working to provide end-to-end solutions for our customers beyond the real estate, which is providing new sources of revenue. This includes energy solutions where we are leading the way with solar, storage and EV charging and notably we crossed hundred megawatts of power production this quarter and will add another 20% by year-end, dramatically accelerating our pace.
Additionally, we're innovating with Workforce Solutions to serve our communities and tackle the acute shortage of labor through our community workforce initiative. This program has trained over 13,000 workers to date across 15 markets. These efforts are a logical progression of our ESG leadership and are integrated with our premier global portfolio, industry leading cost structure, strong balance sheet and strategic capital platform. We continue to believe our best days lie ahead and look forward to reporting out on our progress.
With that, I'd like to pass the call back to the operator for your questions.
