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spaces Prologis Europe Magazine

Summer 2013

high

Flying

logistics

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E-commerc e: S up Rapid De live plyin ry: g Ne th e Ge w T Re r rm e an n y:

Web e d Wi -Suit d o l or ild-t iew u W v al in B ider s ds n in A

Plus: Growth in Central and Eastern Europe

bright ideas for cutting costs Prologis in China and a closer look at how Prologis is making a positive impact for its customers and communities


contents

partners for progress

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e-commerce: supplying the real world wide web

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central and eastern europe

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rapid delivery: new trends in build-to-suit

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customer spotlight: fashion logistic

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build-to-suit: a perfect fit

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bright Ideas: energy efficient lighting

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rising in the east: china

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schiphol: flying high for logistics

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logistics real estate in germany: an insider view

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a positive impact for customers and communities

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Published by Prologis Europe, May 2013 WTC Schiphol F-6, Schiphol Boulevard 115, 1118 BG Schiphol, The Netherlands

About Prologis. Prologis, Inc., is the leading owner, operator and developer of industrial real estate, focused on global and regional markets across the Americas, Europe and Asia. As of March 31, 2013, Prologis owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, properties and development projects expected to total approximately 559 million square feet (51.9 million square metres) in 21 countries. The company leases modern distribution facilities to more than 4,500 customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises.

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spaces introduction

partners for progress Today Prologis is the world’s largest owner, operator and developer of industrial real estate. But what does this mean for you? With 1,400 professionals active across 21 markets, Prologis regards itself as the global partner to local trade. As well as an extensive portfolio of modern, efficient and cost-effective distribution facilities, we aim to provide unparalleled industry insight together with unrivalled customer service. It’s working. In 2012 our European leasing activity totalled 3.1 million square metres and we’ve had a great start to 2013. As of 31 March 2013, our European portfolio totalled 12.9 million square metres (384 million square feet) spread across almost 600 facilities. For customers wanting to build their own bespoke facilities, we also have a significant land bank that is ‘ready to go’, meaning that construction work can begin as soon as a deal is signed. We take time to listen to your needs and understand how your new facility would fit with your logistics strategy before putting forward a detailed proposal. It’s also important to understand how market trends could influence your plans, so our inhouse research team keeps abreast of the latest industry developments, helping us help you stay one step ahead. The rise of e-commerce is a great example. As retailers grow their online businesses, they are shifting their focus from costly high street retail stores to more costeffective warehouse space. In today’s economic environment, many of our customers recognise that moving from a national to a regional or even pan-European distribution network can bring cost and efficiency benefits.

Our larger, more modern distribution centres are not only strategically located in regional and global markets, but they are often designed with sustainability in mind. Earlier this year Prologis was named as one of the ‘Global 100 Most Sustainable Companies’ at the World Economic Forum in Davos. Financially, Prologis is in a strong position. At the beginning of this year we formed the Prologis European Logistics Partners (PELP) with Norway’s sovereign wealth fund, which helped us scoop the ‘Global Real Estate Achievement of the Year’ trophy at the “Oscars” of the property industry, the Property Awards 2013. As well as helping our customers reduce their environmental impact, our social responsibility programmes further enhance the communities where we live and work. For example, our first IMPACT Day on Friday 17 May involved the entire Prologis team contributing more than 7,000 hours’ worth of work to charitable causes in locations where we operate. It is with pride that I can say, whether it is for our customers or our communities, Prologis is a partner for progress.¶

Philip Dunne President Europe, Prologis

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Prologis Park Marston Gate

E-commerce:

Supplying the Real World Wide Web The widespread adoption of high-speed Internet combined with the increasing popularity of mobile communications is changing the way people purchase goods. Over the past five years online retail, or e-commerce, sales rose between 58% and 64% in the US, EU and Japan and the market is still considered to be in its infancy.

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spaces feature

Market penetration is just 6.5% of total retail sales and is forecast by Morgan Stanley to rise to 9.3% by 2016 and by Forrester Research to reach 25% and higher over time. As a result, many retailers are re-evaluating their business models—and supply chains—to take advantage of this growth potential. This is having a positive effect on demand for warehouse space, as retailers recognise the benefits of shifting from supplying and maintaining an expensive network of high-street shops, to large, efficient distribution centres.

Location, Location, Location

Prologis research indicates that over the last five years every additional €1 billion of online sales resulted in an average additional warehouse demand of 72,000 square metres, or 775,000 sq ft, in Europe’s three largest e-commerce markets, the UK, Germany and France.

Leading markets

Many types of business are looking to access the online market, and even though Amazon is the largest online retailer, it is interesting to note that the traditional bricks-and-mortar retailers have a larger share of online retail sales than web-only retailers.

Off the shelf solutions Based on its extensive experience serving a wide range of e-commerce businesses, Prologis has found that these customers typically do not require their own special facilities to support this activity. The main difference in the way that e-commerce customers operate is their batch order picking and processing, which tends to take more space. But, typically, the e-commerce company will construct mezzanine floors for these activities, which fit perfectly fine in existing modern facilities.

While existing facilities may be adapted with relative ease, e-commerce business have slightly different requirements with regards location. Facilities must be located close to population centres as this provides easy access to a large work force, which is required for the intensive batch order and picking process. It also facilitates speedy (next or same day) deliveries and returns, while minimising transportation costs.

There are significant differences in the adoption of e-commerce around the world, and this is where Prologis, as the largest owner of logistics property in the world, aims to take advantage of its familiarity with local markets. At the top end in terms of market penetration and spending per capita are the US, the UK and Japan. The second grouping, mature markets but smaller in size, includes Germany and France. Behind those countries are emerging powerhouses, principally China but also Brazil, where e-commerce penetration is low but growth rates are higher.

Leading the way Despite these emerging trends, it is still early days for e-commerce and an industry standard has yet to emerge. Prologis’ in-house research team remains at the cutting edge of developments ensuring that the company’s customers are well-placed to take full advantage of the latest industry thinking. ¶

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Central and Eastern Europe Economically, Central and Eastern Europe (CEE) is growing faster than western Europe. This has helped drive a stellar performance in Prologis’ CEE portfolio. Leasing activity in 2012 was as strong as the previous

Notable lettings for Prologis in the first quarter

three years. More than 1.1 million square metres

included 11,900 square metres (128,000 square feet)

(11.8 square feet) of space was let, equivalent to

to DSV and 4,800 square metres (52,000 square feet)

38% of the CEE logistics market. The highlight was a

to SHT Technopoint in Bratislava, 11,400 square

letting of 86,000 square metres (925,700 square feet)

metres (123,000 square feet) to Fiege at Hegyeshalom

to Tesco in Slovakia, the largest lease renewal in the

in Hungary and an 18,300 square metre (197,000

CEE industrial market.

square foot) Build-to-Suit facility for Tradis, part of

At the end of the first quarter of this year the

Eurocash Group, at Wrocław V in Poland.

3.5 million square metre (37.7 square foot) portfolio

The momentum has continued in to the second

was 90.2% occupied - up 330 basis points from

quarter. Last month Prologis signed six leasing

December 2011.

agreements for a total of 54,900 square metres

Influencing factors include the growth of existing

(590,000 square feet) in Poland.

customers in the Czech Republic and Slovakia,

The company signed two new leasing agreements at

the continued consolidation of retailers’ logistics

Prologis Park Szczecin in the north of Poland and has

operations in Poland and supply chain reconfiguration

renewed four leases, totalling 39,800 square metres

across the CEE.

(428,000 square feet) at various locations around

Infrastructure improvements have also had a

the country.

beneficial effect on the logistics market. Poland,

The new leasing agreements comprise 7,900 square

Slovakia and Romania are building national highway

metres (85,000 square feet) to Schenker, an integrated

systems and the Czech Republic and Hungary

logistics solutions provider, for use as a distribution

are putting the finishing touches to their more

hub for Poland and the Central and Eastern European

advanced networks.

region and 7,200 square metres (77,500 square feet) to Swedwood, a wooden furniture manufacturer and distributor and part of the Ikea group, for use as a distribution centre for Poland and the Baltics.

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spaces on location

Tradis

square metres 18,300 197,000 square feet

DSV

metres 11,900 square 128,000 square feet

Fiege

metres 11,400 square 123,000 square feet

The four leasing renewals were to Fiege in Dąbrowa, Sonoco Poland – Packaging Services in Wrocław, and Rhenus Contract Logistics in Poznań and Dąbrowa. Interestingly, requirements from occupiers are

SHT Technopoint

metres 4,800 square 52,000 square feet

increasingly focused on cost-effectiveness and efficiency. Prologis is working hard with its customers to meet these aims. The company built a 6,800 square metre (73,200 square foot) extension for Rohlig Suus Logistics in Janki, which was designed to minimise electricity consumption and reduce waste, and achieved significant energy and CO2 reductions for Unilever by investing in more efficient lights at its 50,000 square metre (540,000 square foot) facility in Piotrków. Customers at Prologis Park Sochaczew benefited from a natural gas connection, which has led to heating cost savings of 25-30%, a traffic organisation improvement, and a remote meter reading system. The market is set fair for the rest of the year owing to

Prologis Park Galanta

an increasingly favourable supply/demand balance. While the level of vacant space drops and development activity remains low, there is healthy demand for grade A facilities from retailers and companies operating in e-commerce, fast-moving consumer goods and logistics. This could lead to rental periods gradually increasing from three to five years, and more development in core markets, such as Chorzów, Wrocław, Stryków and Poznań in Poland, Bratislava and Prague. ¶

Prologis Park Hegyeshalom

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rapid delivery »»»»» One of the hottest topics in the industrial property sector seems to be the lack of available Class-A space. But this is not the only challenge confronting the market and perhaps it is not the most serious. Rather, occupiers’ increasing preference for new bespoke facilities could become more problematic since these buildings are increasingly needed more quickly than Build-to-Suit developments can traditionally be completed.

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spaces feature

»» new trends in Build-to-Suit The delay in building delivery is often caused by the planning process; a wide range of complex issues have to be addressed before a planning consent can be granted. As a result, it can often take several years - as well as considerable expertise and investment - to build the planning case for a site.

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Prologis Park Basildon

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DE TA

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‘Ready-to-Go’ W

Strategic locations with Detailed Planning Permission

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In the current market, where fast delivery Build-to-Suit is becoming the preferred option, the planning status N R M becoming a critical question. of a siteNisI Ntherefore G PE Recognising this situation, developers are looking at different ways to promote their land bank and one of the most commonly used labels is the term ‘Ready-to-Go’. This phrase can be defined in several different ways and can cover many stages of readiness. However, for Prologis ‘Ready-to-Go’ means just that; it means that the site has detailed planning permission and construction work can start on site as soon as a deal is signed. In the UK, for example, Prologis customers are able to move into their new facilities within 10 months.

Anticipating the demand for new facilities that can be delivered within a tight timeframe, Prologis UK has been actively preparing its prime sites in the Midlands and the South East sites. At the start of 2013, the company had detailed planning permission for 465,000 square metres (5 million square feet). By the end of March, this figure had risen to around 557,000 square metres (6 million square feet). In February, Prologis UK gained planning permission for a 24,200 square metre (260,500 square foot) distribution centre at the former Visteon Radiator Plant site in Basildon. Then in March, Central Bedfordshire Council granted planning permission for two buildings of 27,900 square metres (300,000 square feet) and 33,400 square metres (360,000 square feet) at Prologis Park Dunstable. As Andrew Griffiths, managing director of Prologis UK said, “We are investing in strategic locations with the aim of offering our customers the best range of distribution opportunities in the UK market.” ¶

We are investing in strategic locations with the aim of offering our customers the best range of distribution opportunities in the UK market.

Prologis Park Boscombe Road Dunstable

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Customer Spotlight:

Fashion Logistic

Building and maintaining strong relationships with more than 4,500 customers worldwide is no easy task, but for Prologis it’s just another day at the office. “In Italy, every new customer is important to us,” explains Daniele Sotti, market director, Prologis Italy.

So we go that extra mile to make sure that every business development opportunity translates into a long-lasting and fruitful collaboration for both companies.

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Daniele Sotti

Catwalk Quality Italy is well-known for being at the forefront of the fashion industry, so when Fashion Logistic, part of the TRACONF GROUP, was looking for a new facility, the Prologis Italy team was delighted to step up to the challenge. After meeting with Fashion Logistic and listening to their needs, the team developed a comprehensive, quality proposal. “Fashion Logistic were looking for a new distribution facility to serve as a national base for a leading youth fashion brand,” says Sotti. “But they also needed high quality office space. Only a strategically located, modern distribution park with excellent office facilities would hit the mark.” With a platform which spans 778,300 square metres (8 million square feet) of distribution space in Italy, Prologis owns and manages a wide range of logistics parks within easy reach of the country’s population centres including Milan, Pavia, Turin, Bologna, Padova and Rome.


spaces customer spotlight

Prologis Park Piacenza

Located 70 kilometres south of Milan, Prologis Park Piacenza was the obvious choice for Fashion Logistic. The park is well-placed to serve northern and central Italy thanks to its excellent transportation links and proximity to the junction of the A1 Milan-Rome highway and the A21 Torino-Brescia highway. Furthermore, its four modern facilities – which together provide 84,000 square metres (904,000 square feet) of distribution space – feature covered rail docks and a direct link to the main Piacenza freight station. Other features such as a 10 metre clear height, ESFR NFPA sprinklers, separate guard house, fencing and separate parking spaces for cars and lorries, made the site an even more compelling proposition.

Fashion Logistic agreed, signing a new lease for 10,000 square metres (108,000 square feet) of distribution space in the first quarter of 2013. “Prologis Park Piacenza is both modern and strategically located, perfectly meeting our national distribution requirements,” said Stefano Pistilli, managing director of the TRACONF Group. ¶

The facility’s impressive safety features, comfortable working environment and efficient office space make it the ideal choice.

Good Fit

Prologis in Italy Prologis’ Italian portfolio comprises more than 780,000 square metres of distribution space spread across 27 facilities located in the country’s most strategic logistics markets including:

Customers include:

• Assa Abloy Italia • Ceva Logistics Italia • D’Alterio Group 3

1 2

• Dap Sides Logistica

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• Di.Far.Co

4

• FBH, Fintyre • Flextronics Italia

Italy

• Geodis

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• H&M • Hitachi Transport System • Huhtamaki • Ipercoop • ND Logistics • Lodeman • Polyedra • Sittam

1

2

3

4

5

6

Milan

Pavia

Turin

Bologna

Padova

Rome

• GFL S.p.A. • Yusen Logistics

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Build to-Suit A Perfect Fit

Europe holds 4.5 times less Class-A industrial distribution space than more mature markets such as the U.S., suggesting room for further growth in the region. In 2011 and 2012, Build-to-Suit (BTS) deals formed as much as between 90-100 percent of the market’s development activity and while speculative development could be set to return to the most constrained markets over the next 12-24 months, BTS will remain an important option for businesses looking to move into modern, efficient and strategically located distribution facilities. In Poland, Prologis recently signed an agreement to develop an 18,300 square metre (197,000 square foot) BTS facility for Tradis at Prologis Park Wrocław V. Tradis, part of the Eurocash Group, is a Polish distribution company specialising in food, chemicals and cosmetics. The new facility is the third Prologis will have developed at the park in less than 24 months, reflecting strong market demand and customer confidence in Prologis to deliver on its promises.

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In the first quarter of 2012, Prologis delivered a 19,100 square metre (206,000 square foot) BTS facility to UPM Raflatac, a leading provider of self-adhesive label materials. This was followed in the fourth quarter of 2012 with an agreement to construct a 17,800 square metre (191,600 square foot) BTS facility for a leading wholesale and retail supplier of white goods and electronic equipment. When a deal is signed, BTS facilities can progress very quickly. In the UK, for example, construction work is moving ahead on the new 34,100 square metre (367,500 square foot) warehouse Prologis is building for The Pallet Network (TPN) at Prologis Park Midpoint in the West Midlands. The facility, which has been designed to achieve BREAAM 2011 ‘very good’ accreditation and the best Energy Performance Certificate (EPC) rating possible for its size range, is due to reach completion by the end of 2013.


spaces feature

TPN is one of the UK’s leading palletised freight distribution networks and the company has occupied a 29,000 square metre (312,000 square foot) distribution centre at Prologis Park Midpoint for over three years. The new cross-docked facility, which is being built on a site close to the company’s existing distribution centre, will allow TPN to expand.

This is typical of Prologis’ approach to developing bespoke facilities, leveraging its global knowledge and local expertise to deliver a solution which meets specific customer needs. ¶

As Alan Sarjant, senior vice president at Prologis UK says, “This new building has been designed to meet TPN’s requirements and will provide an efficient, cost-effective base from which the company can further develop its business.”

CGI of the TPN building at Prologis Park Midpoint

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Bright Ideas energy efficient lighting One common goal for many companies is to make their supply chains more sustainable while reducing their carbon footprint. An excellent way to do this is through retrofitting older warehouses to reduce their energy usage. Unfortunately, this can often be a costly initiative as industrial facilities, which are an important part of the supply chain, can be relatively old. Investing in expensive green technology is considered a poor investment. So how can these facilities be improved and become more sustainable without breaking the bank? The Prologis Project Management Team have tackled this issue by undertaking numerous studies to identify modern lighting solutions that best serve customers’ needs. Most recently the company has investigated improving lighting intensity performance to enhance the working environment and significantly reduce overall operational costs. Taking a 10,000 square metre (108,000 square foot) warehouse space as base model, a team of Prologis experts examined the use of LED type fixtures versus six types of T5 light fittings selected from the ranges of a number of leading manufacturers.

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The analysis was based on the following major parameters: •

Performance of 150 LUX intensity between racking

Overall investment cost

Energy use in kWh/annum

Lifespan of light source

Maintenance costs

Replacement costs

15 year life cycle cost analysis based on 6,000 hr/annum use

Warranty terms

These were compiled into universal units of lifecycle cost based on kWh/annum/lumen to allow for a fair and comprehensive analysis of different lighting solutions.


spaces property management

Based on the 10,000 square metre model, the use of modern lighting would result in approximately €14,000 to €16,000 in annual savings, which is equivalent to a 2.5 month rent-free period over an average lease term.

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High Bay Lighting

Comparing the data collected against operating costs for a typical second generation building equipped with T8 type fittings, the study concluded with two major findings:

Use of T5 mirrored fittings results in approximately

Combined with use of motion sensors, the annual savings increases to between €20,000 and €22,000 equaling almost four months’ free rent over the same period.

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35%

operational savings

Use of LED (highbay) type fitting results in approximately

30%

operational savings

We have established that the return on investment is two-and-a-half years for T5 lighting and 10 years for LED for a lighting retrofit project. Using motion sensors as part of lighting retrofit can deliver an additional 40% savings. Balazs Bellak, vice president, project management, Central & Eastern Europe.

In addition to the significant savings in operational costs, using modern lighting solutions considerably reduces the carbon footprint which is an important factor for Prologis’ global sustainability initiatives. ¶

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Chin Rising in the East

As the world’s second largest and fastest-growing economy, China is widely recognised as a global powerhouse for international trade. Today, China is the largest exporter and the second largest importer of goods in the world. For Prologis, around 80 percent of the company’s business is based on domestic consumption, which as Ben Cornish, president of Prologis China says, is the future of China’s economic model rather than the export machine that exists today. It is a sector which is growing rapidly thanks to burgeoning middle classes and a significant rise in income per capita. By way of illustration, a Reuters report indicates that in 2009 China became the world’s largest car market with vehicle ownership quadrupling since 2000. As a result of the growth in domestic consumption, demand for industrial real estate is rising fast. Yet the logistics industry is still in its infancy; underdeveloped and highly fragmented with virtually no modern stock.

Ready for Growth With an operating platform of 510,000 square metres (5.5 million square feet) and an occupancy rate of 96.9%, Prologis is making significant inroads in China. It is also well-positioned to take full advantage of the country’s huge potential for growth. “We are a speculative Class-A logistics developer, which means we need to know our customers, their business plans and their requirements inside and out, so that what we put up will lease,” says Cornish. “We have the opportunity to participate in the build-out of the entire Class-A logistics infrastructure for China from the very beginning.

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Building Relationships It is a strategy that is working well. In the second quarter of 2013, Prologis announced a Build-to-Suit agreement for two facilities with leading Chinese logistics provider, Deppon. The agreement, which totals almost 42,000 square metres (452,000 square feet) extends the two companies’ relationship to more than 92,900 square metres (one million square feet) across five markets in China. The new facilities will be located in southern China at the Prologis Dongguan Shipai Logistics Centre and will serve as a regional distribution hub for the East Pearl River Delta region. The development will feature an extended truck court to support Deppon’s express inbound and outbound operations. The facilities are proximate to the Congguan Expressway, which will be completed by year-end and provide direct access to major cities like Guangzhou and Shenzhen. However, the market is not without its challenges. The benefits of Class-A space are not immediately understood and land is not readily accessible as it is in other countries; developers—including those from the office and retail sectors—need to compete against strict Government quotas. “China is a huge opportunity but also a huge challenge,” explains Cornish. “Many foreign developers have come to China over the years, but very few have had success.”


Recognising Success

Yet Prologis is bucking the trend, as its recent transactions and success at a number of prestigious awards clearly demonstrate. Prologis was the only winner from China at the Asia-Pacific Property Awards in May, adding to the company’s trophy cabinet which includes “e-Commerce Logistics Park Provider of the Year” for excellence in service and the “Five-Star Warehouse” award for six Prologis properties across China. ¶

global focus

ina

spaces

Transport Infrastructure

Heavy investment in transport infrastructure is opening up possibilities for Prologis customers to benefit from a well-connected modern supply chain. A 2009 KPMG report (Infrastructure in China: A Foundation for Growth) indicates that the country’s express network has been growing at an average of 20 percent each year. The highway network is targeted to reach 3 million kilometres by 2020, up from about 2 million in 2008.

The highway network is targeted to reach

3 million km by 2020 up from about 2 million in 2008. Tiger Du, Prologis China’s West Region VP, receives the Asia Pacific Property Award.

Prologis Chengdu Airport Logistics Centre

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Schiphol: high

Flying

logistics

FOR

Schiphol is Europe’s third busiest airport in terms of cargo volume, with just under 1.5 million tonnes travelling through its gates in 2012. Its location close to the seaports of Amsterdam and Rotterdam, and excellent road network which supports more than 25 third-party logistics providers, make Schiphol a logistics hot spot for the entire Benelux region and beyond. Although cargo volume dropped by 2.6 percent in 2012 compared to 2011, Bram Verhoeven, vice president of Prologis Benelux, is confident that this is just a temporary dip. Between January and April 2013 inbound and outbound cargo volume actually increased by 1.6 percent compared to the same period last year. For Prologis, the airport’s strong performance and popularity among logistics providers translates into a consistently high occupancy rate, and an optimistic view of the future. “We’re well placed to support our customers looking to get into the Schiphol market, thanks to our strong portfolio of high quality facilities and attractive Build-to-Suit opportunities in the area,” he says.

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Prologis is one of the largest owners and operators of logistics real estate in the Schiphol region with around 195,000 square metres of distribution space across 17 strategically located, state-of-the-art distribution facilities (as of 31 March 2013). It is a platform which is continuing to prove highly attractive among a broad range of companies. For example, a leading provider of cloud- and carrier-neutral colocation data centre services in Europe, has just signed a 10-year new lease for a 13,700 square metre (147,500 square foot) facility at Schiphol DC2. Around the same time, Rutges Cargo Logistics & Warehousing B.V., an air cargo logistics provider specialising in the transportation of hi-tech equipment, pharmaceuticals and perishables, also signed a 10-year lease for 2,840 square metres (30,570 square feet) of office space in Schiphol Southeast. Meanwhile, DHL Global Forwarding, a world leader in the air and ocean freight markets, has signed a long-term agreement to continue operations at Schiphol DC3, a modern 19,400 square metre (209,200 square foot) cross dock facility.


spaces on location

With three deals in the first five months of 2013, we are seeing a reversal in market fortunes in the Schiphol region. Bram Verhoeven

Inbound cargo volume by region 2012 (tonnes) Asia

283,600 North America As well as offering unparalleled access to Amsterdam Schiphol Airport, all facilities are situated near main roads (N201 between Haarlem and Utrecht, the A4 between Amsterdam, Rotterdam, Brussels and Paris, and the A9 connecting with the A2 to Utrecht and the A1 to Germany). Excellent public transport connections also provide easy access for employees travelling from Amsterdam, Hoofddorp and Amstelveen. As Bram Verhoeven points out, these long-term contracts clearly demonstrate that the demand for modern, strategically located facilities is positive news. ¶

125,500 Africa

112,200 Latin America

82,500 Europe

80,300 Middle East

67,700 Prologis Park, Schiphol II

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Germany: Logistics Real Estate in

An Insider View

Alexander Heubes

Sascha Petersmann

Roland Hennebach

Vice President, Market Officer West & Central Germany

Vice President, Market Officer Southern Germany, Austria, Switzerland

Vice President, Market Officer Northern Germany Prologis

aheubes@prologis.com

spetersmann@prologis.com

rhennebach@prologis.com

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spaces people

Prologis’ Market Officers in Germany have considerable experience in the real estate sector. Here they share their views on the latest trends and developments, as well as the factors shaping customer demand.

What are the main reasons customers prefer to partner with Prologis in Germany? RH: There are many reasons, but the most important include the strategic location of our facilities, the competent support and consultation they receive during the decision-making process, and the positive references from our existing customers. A competitive pitch also helps, of course.

AH: E-commerce is an important driver which is contributing to demand for larger facilities. We’ve also seen an increase in demand for warehouses which are suitable for storing liquid hazardous goods, and floors capable of supporting loads of up to seven tonnes becoming more common.

What’s the most unusual customer request you’ve received and how did you address it? How has customer demand changed in the last five/ten years? AH: Many third-party logistics providers (3PLs) are looking to move into larger, more modern and efficient warehouses. This has opened up the possibility of multiuser facilities. SP: We’ve also seen an increase in demand for sustainable facilities, as this contributes to our customers’ corporate social responsibility targets and helps them reduce their overall operating costs due to the lower energy usage and so on. We’re responding by aiming for Gold Certification from the German Society for Sustainable Construction (DGNB) when developing new facilities.

What trends are you seeing in your market right now? RH: Our customers are looking to the future. They want to be in a position to capitalise on growth when the economy supports it, so they need facilities which allow them expand quickly, without changing location. This is a clear advantage of our logistics parks. SP: There is a shift in focus from the core markets because of the lack of available good quality land. This is also why there is little speculative development at the moment.

RH: We were once asked to host a wedding in one of our facilities in Cologne, but as this wasn’t from a customer and because it would not have generated a consistent income stream, we decided to pass on this particular opportunity. SP: We try to solve all customer requests, no matter how unusual. On the rare occasions we’re unable to provide a solution we’re more than happy to support the customer by helping them find the right contact through our extensive network.

How do you see logistics real estate in your region evolving in the future? AH: Logistics real estate is becoming increasingly important as part of the overall logistics infrastructure, especially given the rise of e-commerce. The lack of land also means that the importance of larger logistics parks located close to population centres is becoming increasingly recognised. ¶

For more information about Prologis in Germany go to www.prologis.com

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for Customers and Communities The publication of Prologis’ sixth Corporate Responsibility Report earlier this year documents the company’s 2012 activities in support of environmental stewardship, social responsibility, ethics, and corporate governance. The report lists some impressive statistics. In 2012, Prologis saved enough energy to power nearly 93,000 square metres (100 million square feet) of its global portfolio — the equivalent of about 40,000 homes. This energy total, which is detailed in the 2012 report, was accomplished through energy efficient design in its new developments, energy efficiency upgrades that reduce power requirements and directly benefit our customers, and output from the company’s rooftop solar projects. Additional topics detailed in the report include sustainable development activity, energy efficiency efforts, community involvement and stakeholder engagement.

The report outlines last year’s accomplishments, including: • Certification of 3.5 million square metres (38 million square feet) of sustainable properties in 11 countries • Completion of 25 million square metres (270 million square feet) of energy-efficient improvements at 50 percent of the properties in the Prologis global operating portfolio • Installation of 83 megawatts of renewable energy in six countries with a total of 1.9 million square metres (20 million square feet) of rooftop space utilized by solar projects

Global 100 Most Sustainable Companies Prologis was named as a member of the ‘Global 100 Most Sustainable Corporations in the World’ List at the World Economic Forum in Davos, Switzerland. Recognized as the world’s most credible corporate sustainability ranking, the Global 100 consists of the 100 top-performing companies worldwide based on a range of sectorspecific sustainability metrics.

According to Steve Campbell, senior vice president, Environmental, Engineering and Sustainability Programs, Prologis is continuing to grow its industry-leading corporate responsibility programme, focusing on delivering the most energy efficient portfolio in the industry. “These initiatives have significant environmental benefit, will reduce customer operating costs and enhance asset value for investors.” The complete report is available online only at www.prologis.com/cr

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Inaugural IMPACT Day As well as optimising the efficiency of its portfolio, Prologis supports hundreds of community activities and social causes in its areas of operation. In 2012, Prologis donated more than $1.4 million in cash and in-kind donations to charities and organisations in need. Community engagement activities in 2012 included environmental cleanup activities in Japan, volunteering at food banks throughout the United States and bike and foot races in China, Europe and the U.S. to support various charitable causes. On 17 May 2013, Prologis engaged in its first annual IMPACT Day, a round-the-clock global community engagement endeavour supporting 55 organisations relating to education, human welfare and the environment. IMPACT Day emphasises the company’s core values of Integrity, Mentorship, Passion, Accountability, Courage, and Teamwork. Activities ranged from environmental cleanup efforts in the United States to student mentorship in Europe to supporting road safety programmes in Asia. Volunteer efforts began in Tokyo and proceeded across 53 cities in Asia, Europe and the United States, concluding in San Francisco. In Europe, activities included renovating children’s animal farms in the Netherlands, creating a sensory garden at a special needs school in the UK and supporting the Centre for Rehabilitation, Education and Care in Poland.

We believe it is vital to support for our local communities, encourage our employees to participate in volunteer activities within their communities and continue to work together to reduce our impact on the environment

Philip Dunne, president of Prologis Europe

Twitter News Feed #PLDIMPACT Sarah Usher

@sarahcateusher

Chicago is so grateful to @Prologis for providing this opportunity to serve our community #pldimpact #teampridetoday

Prologis

@Prologis

In honor of our 1st annual #Impactday, over 1,400 Prologis employees will volunteer over 7,000 hours! #PLDImpact

Atle Erlingsson @aerlings

Team @Prologis prepping to paint at occupancy hotel in #SanFrancisco #pldimpact Paul Weston

@BushWeston

Team UK @ end of a tiring but satisfying day #PLDIMPACT


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If you need high quality distribution space, you can rely on Prologis to deliver the right building in the best location for your business. We understand that you need facilities that can enhance your operations at strategic sites across Europe. Positioning is important and we can position you where it matters – that’s why our customers choose Prologis.

Prologis is the leading provider of distribution buildings with over 51 million square metres owned and under management in 21 countries on four continents.

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Prologis Europe Spaces magazine, summer 2013  

Spaces is Prologis Europe's customer focused magazine. Published twice a year, it provides an insight into the company's European operations...

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