French Fund Ojirel Buys a 7,360m2 Warehouse in Madrid

6 November 2018 – Eje Prime

International funds are continuing to back the Spanish logistics sector. The investment firm Organa III, created by the French real estate investment company Ojirel, has just acquired an industrial warehouse spanning 7,360 m2 in Madrid.

The asset, located in the municipality of San Agustín de Guadalix, was owned by a Spanish company specialising in logistics services. The contract specifies that the warehouse will continue to be operated by its previous tenant, a German multi-national specialising in automotive spare parts, for five more years.

The operation, which has been advised by the real estate consultancy firm Iremcap, “shows the growing interest from French real estate investment funds in the acquisition of real estate assets in Spain”, according to sources at the consultancy firm.

Madrid is one of the magnets in the country for logistics investors. Although the spectrum of the sector is increasingly broad and is spanning increasingly more regions, the area surrounding the Spanish capital is the most attractive for 63% of those surveyed in the latest edition of the International Logistic Fair (SIL), which is organised every year by the company Prologis.

That is also reflected in the numbers. 632,000 m2 of logistics space was leased in the Spanish capital during the first half of 2018. Similarly, more than half of the assets leased corresponded to warehouses with a surface area of more than 20,000 m2, according to the latest report published by CBRE.

Due to the boom in e-commerce, in particular, the market for industrial centres and warehouses in Spain is currently one of the strongest in Europe. Despite the high demand for assets, in cities such as Barcelona and Madrid, just 4% of stock is available, which is driving up rental prices. The experts indicate that the main challenge facing logistics firms between now and 2022 is how to “adapt existing properties to the new needs of companies”.

Original story: Eje Prime (by B. Seijo)

Translation: Carmel Drake

Prologis Leases a 11,600 m2 Warehouse in Madrid

30 October 2018 – Eje Prime

Prologis is arriving in Coslada. The US logistics company has leased a warehouse measuring 11,600 m2 to the courier and express transport company Tourline Express in the municipality of Madrid.

The logistics centre is located fifteen kilometres from the centre of Madrid, at the start of the Corredor de Henares, the main logistics axis in the capital of Spain, and two kilometres from Barajas airport.

Similarly, the park has direct access to the A-2 motorway, as well as to the M-21 and M-45 motorways. For Gustavo Cardozo, Senior Vice-President of Prologis Iberia, “the great appeal of this location stems from its high-quality properties and strategic connections”.

Madrid is the jewel in the Spanish logistics crown. Although, other regions have grown considerably in recent years, and the spectrum of the sector is increasingly broad, the Madrid area – including the province of Guadalajara – is the most attractive for 63% of those surveyed at the most recent edition of the International Logistics Fair (SIL), which Prologis organises every year.

Prologis is a US logistics company, listed on the New York stock market, which has a presence on four continents in 19 countries. In Spain, it has 42 distribution centres, located in Madrid, Barcelona, Valencia and Tarragona, where it has more than 786,731 m2 of logistics space. As at 31 March, the company had undertaken investments in properties and projects under development spanning approximately 63 million m2.

Original story: Eje Prime

Translation: Carmel Drake

Urban Hubs: The Future Pillars of the Last Mile are Seducing the Real Estate Sector

22 October 2018 – Eje Prime

Blackstone, Goldman Sachs, Prologis and Amazon have started to invest in urban hubs. The future pillars of e-commerce logistics are still in an embryonic phase, but the large real estate investors have started to track these types of assets, whereby sparking interest from other players. Forgotten old warehouses and factories (and even office buildings) in inner cities are now seducing these giants, which regard them as the new urban nuclei for handling same-day deliveries, and even, same-hour deliveries, which are demanded by e-commerce nowadays. Spanish investors are already beginning to study opening logistics centres in the heart of Madrid and Barcelona.

The Spanish market is still at the tail of the e-commerce market in Europe, where it represents just 4% of all retail sales, compared with 12% in the United Kingdom and 16% in the United States, according to the ratings agency Moody’s. Nevertheless, experts forecast that e-commerce in Spain, and on the rest of the planet, will continue to make inroads to ultimately account for one third of all retail sales.

This drastic transformation of retail is challenging for the traditional logistics system, comprising regional distribution platforms located away from urban centres that supply different local warehouses to delivery to different businesses. The new system is supported by an e-fulfilment centre (a fully automated platform), which directly supplies several urban hubs located inside cities, which make deliveries to consumers (…).

Blackstone, one of the largest real estate investors in the world, has invested around €4 million in small urban warehouses in Europe since the beginning of 2018. Unlike large warehouses on the outskirts of cities, urban hubs are smaller facilities with a lower risk in terms of their development.

The sovereign Singapore fund, GIC, has also entered the segment. The investment group even has a specific division for building logistics facilities on urban land (…).

Nevertheless, they are difficult assets to find and mould for their new function. On the one hand, because cities have grown and transformed over the last few decades, with housing replacing former industrial land (…). On the other hand, because, these facilities need to be rethought for the constant entry and exit of goods.

The future urban hubs will be built on land still classified as industrial inside cities, which is much cheaper than residential. And, given the difficulty of expanding width-wise due to the lack of land, the plans involve constructing properties with various storeys. In large cities in Asia, where land prices are very high, multi-storey warehouses are already typical.

In addition to industrial land, another option for urban hubs is to use office buildings. To the extent that new business areas in new parts of cities are created, so empty and underused spaces are being left in city centres.

Currently, new technology-based distribution companies, such as Paack and Stuart, are shaking up the market, by accelerating e-commerce deliveries using logarithmic calculations. Meanwhile, traditional express transport companies, such as Seur and MRW, amongst others, have also started to adapt to expedite last mile deliveries with small warehouses in the centre of large cities.

Small signs in Spain

Sources in the real estate sector indicate that some investors specialising in retail have started to study the implementation of these types of logistics structure to complement the flagship stores in the centre of Madrid. Specifically, some players have started to analyse the option of installing urban hubs in office buildings.

In Barcelona, we have already seen one case along those lines. In 2016, Amazon opened a warehouse in the former headquarters of the publishing house Gustavo Gili, on Calle Rosselló in the El Eixample neighbourhood, to introduce its Prime Now service offering deliveries within the hour. Nevertheless, sources in the sector indicate that Amazon may have started to question the suitability of that platform since it has not managed to make the prices of the urban land profitable (…).

Aitor Martínez, Head of Industrial & Logistic are Savills Aguirre Newman, points out that in some cities, such as London and Málaga, pilot tests are being carried out regarding deliveries of the future. A common denominator in all of them are the urban hubs. In the logistics of the future, these new logistical nuclei, will not only speed up deliveries, but they will also respond to other challenges in the sector, such as the introduction of greater restrictions over the entry of vehicles into city centres and the prohibition of polluting vehicles from the roads (…).

Original story: Eje Prime (by S. Riera & P. Riaño)

Translation: Carmel Drake

Prologis & Goodman Bid for 24,700 m2 Logistics Plot in Valencia

26 April 2018 – Eje Prime

Giants in the logistics sector are looking to expand their domains in Valencia. Prologis and Goodman have entered the auction for a plot of land spanning 24,700 m2 in the Valencia Logistics Park, also known as PLV. The space is currently owned by the Generalitat Valenciana, which has also put a second industrial plot up for auction, on the same industrial estate and spanning 8,600 m2, for which it has received just one offer.

In total, three other groups have also bid for the largest plot of land up for sale, besides the two international operators, namely: Inversiones y Terrenos Rústicos, VGP Naves Industriales Península and Servicio y Calidad, according to Valencia Plaza.

The five companies are bidding for a plot that the administration has placed on the market offering the option of the purchase and surface area rights, although the Generalitat is going to prioritise offers that express an interest in carrying out an operation over the second point.

After this operation, the Valencian administration will still need to sell 44,600 m2 of logistics land and 16,900 m2 of tertiary land. Moreover, the Generalitat is planning to place another 46,800 m2 of space on the market this year for a concession for a heavy vehicle parking lot on the M2 plot of the logistics park.

Original story: Eje Prime

Translation: Carmel Drake

Prologis Leases 10,600 m2 of Logistics Space in Madrid to Airpharm

9 April 2018 – Eje Prime

Prologis is welcoming the first tenant at its building in San Fernando de Henares, in Madrid. The giant of the logistics sector has leased 10,600 m2 of space to Airpharm, out of a total surface area of 21,000 m2 that it has developed in the area. The entire complex spans a surface area of 90,000 m2 in total.

As a specialist in the supply of transport and storage services for chemical, cosmetic and pharmaceutical products, Airpharm has chosen this property due to “its proximity to the Madrid-Barajas Airport”, amongst other reasons, according to a statement issued by the company.

This operation by Prologis is further evidence of the good health of the logistics sector in Spain. In Madrid alone, the leasing of these kinds of spaces exceeded 920,000 m2 last year, registering record figures. Moreover, during the first quarter, the rental of logistics space rose by 61% with respect to the same period in 2017, when 310,000 m2 of space was leased.

In terms of Prologis, the Spanish subsidiary of the US operator, which has a presence in 19 countries, recorded turnover from rental income of €38 million last year and managed to let 95% of the total surface area that it owns in Spain.

Original story: Eje Prime

Translation: Carmel Drake

Prologis Achieves Full Occupancy at its Logistics Park in Barajas

25 January 2018 – Mis Naves

Today, Prologis, Inc. announced that it has signed a rental agreement for 2,720 m2 with Alfil Logistics and a purchase agreement for 2,720 m2 with Transemer in the Prologis Park Barajas (Madrid). With these operations, the company has reached full occupancy at the logistics park.

Alfil Logistics, a logistics operator that provides services for consumer, food and drinks products; and Transemer, a company specialising in the transportation of goods, have chosen this park for its great location and direct connections with Madrid-Barajas Airport, which is located just 500 m away. Similarly, the park has an excellent communication network with direct access to the A-2 and M-11 highways, as well as to the M-30 and M-40 ring roads.

Prologis Park Barajas offers its clients numerous features, including a 24-hour surveillance service, an internal free height of 10 metres, 6 loading bays per module and a modern fire detection and extinction system.

“With these operations, we take the occupancy rate at Prologis Park Barajas to 100%. Our clients have immediate access to the Community of Madrid’s entire road network and the site is just 500m from Madrid-Barajas Airport”, said Gustavo Cardozo, Senior Vice-President of Prologis Iberia. “We are delighted that Alfil Logistics and Transemer have decided to strategically back our park in Barajas by consolidating their operations there”.

The real estate consultant CBRE and an independent agent have been responsible for advising these operations.

Original story: Mis Naves

Translation: Carmel Drake

Mercadona Leases New 23,000 m2 Logistics Centre From Prologis

7 June 2017 – Expansión

The supermarket chain Mercadona has just strengthened its logistics network by leasing a new warehouse from Prologis. The warehouse, measuring 23,000 m2, is located in Ribaroja de Túria (Valencia), the town where the supermarket chain already has one of its major logistics centres. The distribution group has occupied the site since the middle of May. Sources at the chain explain that this warehouse will serve to support the major block that it already has in Ribaroja, which has seen its needs increase.

The warehouse is located on one of the two plots of land that Prologis acquired a year ago from the Generalitat Valenciana in the Valencia Logistics Park.

The rental price is estimated to range between €4/m2 and €5/m2. After finalising construction work in April, the logistics group reported that it was going to be the first building that it has inaugurated in Spain since 2009 and that it represented a symbol of the reactivation of its property development activity. Prologis’ plans include beginning construction on a second twin centre on the adjoining plot. The logistics company has invested €13 million in these facilities.

Original story: Expansión (by A.Z., J.B. and A.C.A.)

Translation: Carmel Drake

Prologis To Invest €30M In New Logistics Centre In La Ribera

25 April 2017 – El Mundo

The period of lethargy in the logistics sector has come to an end. With a growing demand that far exceeds supply, the US-based multinational Prologis is planning new projects in the Community of Valencia. The company, which is headquartered in San Francisco, inaugurated the first phase of a centre on the Valencia Logistics Park (Parque Logístico de Valencia or PLV) last week and is now finalising the construction of another large project in Massalavés, in the Ribera Alta region. This warehouse will have a constructed surface area of 60,000 m2 on a plot measuring 90,000 m2, according to the Director General for Prologis Iberia, Gustavo Cardozo.

Unlike the property inaugurated in Riba-roja, which the logistics multinational has constructed at its own risk to offer it under lease, the park in Massalavés will be constructed jointly with an operator to whom the new venue will be delivered turnkey. Negotiations with the interested company are very advanced, although Cardozo managed to avoid revealing the identity of the company in question. The project will be carried out on a plot of land that Prologis acquired in 2005, but which has been undeveloped since the outbreak of the crisis.

The Director General of the company in Spain estimates that the investment relating to this project will amount to €30 million, although the impact of Prologis in the region will be higher. In addition to that figure, there is the amount that has been allocated to the construction of the two modular warehouses in Riba-roja (€20 million). This centre, whose first phase is already operational, will generate 170 direct jobs, according to the Councillor for Homes and Public Works, María José Salvador, who cut the ribbon at the inauguration ceremony. Also in attendance at the inauguration were the Director General of Prologis for the South of Europe, François Rispe, as well as the mayor of the town, Robert Raga. (…). According to Raga, the new tenants will move into a plot of land measuring 27,000 m2, which until now had been owned by the Town Hall.

Over the last two years, commercial operations have resumed with a bang on this logistics industrial estate, which the Generalitat developed back in the day. Under this legislature, around 130,000 m2 have been sold, compared with just 10,000 m2 during the previous one. These facilities, located next to the bypass, less than 25 km from the Port of Valencia and 10 km from the airport, are receiving interest from investors, according to the Director General of Prologis, who also thanked the Valencian Government for the powers it has granted to enable this first phase to be executed in just over a year from the date the plots were acquired. (…).

The Riba-roja operation is the first that the US company has undertaken at its own risk in Spain since 2009. Prologis purchased 70,000 m2 of land in July 2016 and by November, had begun construction of the first warehouse, which is divided into four 6,000 m2 modules so that it can be rented out to a single operator or to various. According to Cardozo, it does not look like marketing this space is going to be a problem, given the high level of demand for logistics facilities in this area.

Such is the case that construction is expected to start on the second phase within the next few months. The twin warehouse will also have a surface area of almost 24,000 m2.

Original story: El Mundo (by Francisco Álvarez)

Translation: Carmel Drake

Prologis Invests €11M In A Logistics Project In Madrid

20 February 2017 – Expansión

Prologis, the world leader in real estate assets, has decided to launch two logistics projects in Spain. “Our most recent project involved a 14,000 m2 distribution warehouse, which we built for TNT in the Puerta de Madrid industrial estate in San Fernando de Henares. That was completed in 2015. Prior to that, our next most recent development was initiated at the beginning of 2008”, explains Gustavo Cardozo, Senior Vice President at Prologis Iberia.

Now, Prologis has decided to launch a 23,000 m2 industrial complex in Valencia, which it initiated at the end of 2016, and it is also starting a new 21,000 m2 development in Madrid.

The latter is a logistics building in Prologis Park San Fernando de Henares, a 90,000 m2 industrial complex that Prologis started to develop a year and a half ago, with urbanisation and infrastructure works.

Prologis will invest €11 million in the new building in Madrid, including the cost of buying the land. “The logistics market in Madrid lacks modern and efficient warehouses in the metropolitan area and we think that demand for large spaces is going to grow over the next few months”.

Prologis Spain owns 38 logistics properties covering more than 800,000 m2.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Amazon Revolutionises The Logistics Sector

9 February 2017 – Expansión

The boom in e-commerce and the arrival of the large distribution giants, like Amazon, have caused a genuine tsunami in the real estate market and in the way we understand logistics. Logistics assets – which were, until recently, the ugly duckling of the sector – have really blossomed and now represent one of the investment segments with most potential, given their risk-return relationship, according to the experts.

Operators are increasingly looking for more large logistics warehouses on the outskirts of cities, which they combine with distribution centres situated on ring-roads to make deliveries on time and on budget.

“The effect is a reflection of new consumer habits and online purchases, as well as of consumer expectations, which require products to arrive on time and to be easily returnable (inverse logistics)”, explains Antonio Montero, Director of the Industrial-Logistics business at Aguirre Newman.

Alberto Larrazábal, National Director of Industrial and Logistics at CBRE, said that there has been an increase in the e-commerce market. “Operators are increasingly demanding more logistics and distribution space. In Madrid and Barcelona, 400,000 m2 and 700,000 m2 of space was leased, respectively, in 2016 and e-commerce accounted for 25% of those amounts.

Javier García-Mateos, Partner in Financial Advisory at Deloitte said that “retailers are starting to use their own establishments in cities as logistics and distribution points for e-commerce”.

García-Mateos also said that there is greater demand for the development of cross-docking warehouses (which reduce the time needed for logistics operations and which can be adapted to the needs of e-commerce) in the vicinity of the main urban nuclei. (…).

“Logistics spaces are moving increasingly closer to cities, there are even warehouses inside city centres. These are points where companies can serve their customers in the fastest and most effective way”, said Luis Guardia, Director of the Logistics and Industrial Area at JLL.

Guardia also explained that the major department stores are also committed to opening “regional hubs” to get closer to the major urban nuclei.

Development activity

In terms of investment, Larrazábal considers that the logistics and industrial sectors are becoming more fashionable by the day. “Large funds and private investors will end up acquiring these assets”, he said.

Over the last three years, investment volumes have grown considerably, to reach more than €800 million last year.

One example of this investor appetite is Merlin’s purchase of Saba Parques Logísticos – the company that groups together Saba’s stakes in five parks – for €115 million.

“The logistics market is interesting as it allows the Socimis to diversify and add new assets to their portfolio that generate returns not afforded by the other assets at the moment”, said García-Mateos. Other operators that are committed to this market include Logicor (Blackstone), Zaphir, Prologis, Rockspring, GreenOak and the joint venture between Colony and Neinver.

In the same way, experts indicate that development activity has resumed. “Developers and investors know that there is latent demand in high quality logistics assets and this is encouraging them to buy land and build assets”, said Montero

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake