CRISTIAN OLLER

Spain 2021 | TRANSPORT | VIP INTERVIEW

TBY talks to Cristian Oller, Vice-President and Country Manager of Prologis España, about the company's operations in the country, innovation in the logistics industry, and trends in production.

Prologis, an American multinational with a presence in Spain since 1999, has become one of the main players in the Logistics real estate industry in Spain as well as in Europe, with 2.5% of global GDP going through its buildings around the world. What has been the company's evolution in Spain?

Prologis in Spain started in 1999 in the region of Catalonia with the first high-level park developed in Spain. At the time, there were no private parks with broad maneuvering spaces or as innovative as the one that Prologis brought to the market ESFR sprinklers, docks at 90º, skylights, high clear heights, slab flatness quality, and in turnkey basis. It was a turning point for the industry in Spain. Subsequently, we developed a similar park in Alcala de Henares, in Madrid, with four units measuring 113,000sqm and following the same concept. The park in Catalonia is located in Sant Boi and was a public-private partnership developed with the city hall. Meanwhile, in Alcala de Henares we have a large closed land. Logistics at the time were not highly viewed by the public administration. It was seen as an industry that brought many blue-collar jobs, a great deal of pollution, traffic, noise, and scattered buildings that were not aesthetic because their only purpose was to store goods. We arrived under that context in Spain and worked to change this perception. We are global leaders, and other companies follow our lead.

The logistics real estate industry, due in part to the growth in the food and e-commerce sectors, has successfully navigated COVID-19. You assumed your current position as Country Manager at the end of 2019. How has the COVID-19 challenge been for you?

It has been a challenge, though not that much because we know the business extremely well. 50% of our staff is located in Madrid and the other 50% in Barcelona. Videoconference platforms have been great tools to maintain communications. We have been a 100% digital company for many years, as at a single click we have all the information of the entire portfolio that we manage, one of the resources included in our Prologis FM digital platform. This digital aspect clearly enabled us to adapt quickly to the pandemic. The secret to successfully ride out the pandemic is to be in constant communication with our teams & customers. We are a reduced team, but extremely flexible and efficient. We have 1.2 million sqm and only employ 13 people, and that make us extremely agile. We love changes and are open to them. Success involves innovation and adaptability to changes.

With 1.2 million sqm of logistics assets in Spain, the sky is the limit for Prologis. What lies ahead and what strategy will you follow to achieve it?

There is no limit for us. Our goal is to do things well, and our strategy is clear. We are long-term investors and are here for the long haul. In the buildings we manage, we are already thinking about the next 12 years. With that outlook, we are thinking of buildings that will remain in the market for the next 12 years. We have a diversified platform in the main markets in Spain, namely Madrid, Valencia, and Barcelona. We have clients in many different sectors and high-quality assets in the best locations, and we can serve clients in many different industries. Our buildings measure every single detail. We have our own lab where we test everything that we want to implement. It is a space to test many different things before we launch them into the market. Our added value is eliminating the so-called pain points for our customers and we provide them with everything that has to do with the operation of the buildings so that they can focus on their own business. As market leaders, we have a responsibility to remain innovative. We have to always stay ahead.

What room is there to innovate in the logistics industry, and what new innovations are entering the market?

Innovation is constant. There is a great deal of innovation in automation, though it is not here to replace workers; the innovation is complementary to employees. All e-commerce activities are highly labor intensive, and in some locations workforce is a problem because there is no skill worked for some processes. It is difficult to find experts in logistics in certain locations, so we have a specific division within Prologis to train employees where we teach the profession to all of them and help them to develop professionally in the logistics sector. Innovation is part of Prologis' DNA, and innovation in building design is one of our strengths. These designs help to make buildings more efficient. One of our milestones is the development of 4.0 logistic buildings. The term 4.0 is related to the capacity to connect these buildings to the internet, which help the buildings talk among themselves. We have implemented sensors in our buildings to monitor a great deal of information; for example, we can learn in advance when a gate needs maintenance and can prepare ahead of time the materials required to fix every single gate in our parks. Prologis is completely focused on its clients. We are a customer-centric business, so we analyze all possible problems that customers might encounter because we want them to focus on what they do best while we take care of everything related to the building.

Following the purchase of the 473,000-sqm portfolio of Colonial's logistics assets in 2020, Prologis acquired three buildings in Puerta de Madrid Logistics Park. What does this project mean for the company, and what are its main characteristics?

We recently completed the acquisition San Fernando de Henares is extremely important to us, since it is one of the main logistic areas of Spain. San Fernando is ideal for last mile and the most conventional logistics. In addition to our acquisitions, we have land that we developed ourselves in San Fernando. Its location is unbeatable.

One of the key needs of companies is decentralizing production. How do you evaluate this?

We see emerging trends occurring. To date, logistic units tend to be close to the factories. The trend today, however, is the opposite, which is to put the logistics unit as close to the end customer as possible. Part of that change is because factories are now located overseas, for example China. We have learned from the pandemic that one cannot have all its factories in China, because if the country closes down, the company cannot deliver products. Consumption now is all about immediacy; people want things delivered quickly. The key in e-commerce is to have products close to the customer. According to one of our Prologis Research reports, e-commerce needs thrice the logistics space of a commercial store, and that implies thrice the number of employees. E-commerce is, therefore, extremely labor intensive. We must take into account that e-commerce grew by 30% from March to mid-April, according to market data analyzed by Prologis Research. Spanish market still has huge room of growth in the e-commerce sector, so we will be looking at it over the time. Thanks to its resilience, the real estate for logistics has continued to operate well during the pandemic.

Can you elaborate on Prologis Essentials' Marketplace?

We have reached an agreement with the best brands in the market to acquire many items for our clients at an affordable price, all of which can it be found on Prologis Essentials Marketplace. Another project we have launched is the ParkLife initiative to offer well-being services such as a field court, gym, and different amenities for workers in the industrial park. We will also have a parking area for carpooling, among many other features. This is a business that will only continue to grow. There are many opportunities in the logistics sector. At Prologis we promote a customer-centric model, where customers are at the center of all our operations and decisions.