Basic HTML Version
To the casual observer, logistics
property giant Prologis would
appear to be just about everywhere,
particularly in Europe. It boasts a
portfolio of 669 million ft
2
(62 million
m
2
), of which Europe enjoys 178 million
ft
2
(16.5 million m
2
); It has $59.5 billion
in total assets under management, of
which Europe comprises $14.6 billion.
It has properties in 20 countries, of
which 13 are in Europe.
So where will it spring up next? Henk
Folmer has a surprise in store for
me: “Actually, when we develop new
property, it is mostly in areas in which
we already operate,” he says. Which
leads me on to the obvious next
question – just how do they decide
where those areas are and when they
are ripe for selection? “We are looking
for good infrastructure, good airport
or sea hubs or what we call ‘logistics
corridors’, such as Rotterdam to the
Ruhr, or the Seine corridor between
Le Havre, Rouen and Paris. A new
investment might be because we are
working to a specific customer demand,
or it might be a speculative purchase
by us. Our customers tell us what they
want and we try to deliver it,” he adds.
Owner Operator
Folmer is keen to play down the notion
that Prologis is spreading its net with
wild abandon. “We are very disciplined
and selective in our locations and in
our focus,” he explains. Expanding his
theme, he goes on to cite the tenets
the company likes to observe in its
buying decisions: “We are looking
for established markets, with certain
skills we can develop. Then we want a
location that is useful for more than one
segment of customer, say, retail. And
we don’t want there to be too much
choice of land available. We like to
work with our customers, to help them
expand and move to larger facilities,
rather than see them go down the road
to save £1 in rent.”
Naturally, what customers want
matters, too. In mid-February 2016,
Prologis issued a report which detailed
Europe’s most favoured logistics
locations. Unsurprisingly, sites in
the aforementioned Rotterdam-Ruhr
corridor came out on top, but the
growth of Central and Eastern Europe
(CEE) is also worthy of note. With CEE’s
lower labour and land costs, does this
mean we are going to see a major
shift eastwards in Europe’s logistics
spectrum? Folmer doesn’t see it that
way, not yet at least. “The difference
is that Western Europe is one big
landscape allowing easy movement
whereas CEE still retains many of its
own rules, such as cross-border issues.
You have these existing large hubs
like Warsaw and Bratislava within
that, but we will see that the nature of
e-commerce will slowly change the
landscape.”
Once a customer is satisfied the
location matches up to expectations,
the next stage is the actual shed
itself. I’m interested to know what the
differences are between a Prologis
customer’s ‘need-to-haves’ as opposed
to the ‘nice-to-haves’. Folmer cites
four key needs: “Firstly, the more
doors, in as many locations, the better.
Then the column grid – generally,
fewer columns means more space to
move, so a bad or inefficient column
grid is not acceptable. Height is also
important because making the best use
of the overall space with stacking and
storing requires optimum use of height.
Finally the aisles for the trucks need
to be appropriate for the customer’s
It has a market value of $19 billion and says it is the largest real estate company in the world
by square feet. So what makes Prologis tick?
Paul Hamblin
spoke to Henk Folmer, Senior VP,
Global Customer Solutions, to find out.
36
Logistics Business Magazine | February 2016
PROPERTY
Prologis Park, Chorzów
Henk Folmer
Senior VP, Global Customer Solutions