LOGISTICS BRIEFING: Service is key to retaining occupiers

Europe’s logistics market is booming but warehouse investors and developers should not ignore occupier needs in their drive to make a profit, leading experts told PropertyEU’s European Logistics Investment Briefing in London this week.

‘We are a services industry, yet people often forget how important the occupier is, and that if they do not get good services they will leave,’ said Ian Worboys, Ceo of P3 Logistics Park. ‘With warehousing the tenant is core to our business and this must not be forgotten in the drive for profits and good figures.’

Getting the service charge right is crucial, the briefing heard. Occupiers should feel they are getting value for money in paying for services like security, cleaning and snow clearance. Establishing and maintaining a good relationship with tenants is crucial to running a stable business, Worboys stressed: ‘We have 300 tenants in our portfolio, all the large logistics companies in Europe and all multi-locations, so we want to maintain that special relationship.’

Another key element of a good relationship is listening to tenants’ evolving demands and responding to them quickly. ‘Ecommerce is exploding so retailers are growing rapidly,’ said Worboys. ‘They can double their business in a relatively short space of time, so they might need more units across Europe. As the only developer that literally goes from East to West in Europe, we are giving occupiers the ability to grow with us as we grow with them. The three cornerstones of our success are size, geographical diversity and the ability to work with tenants.’

P3’s modus operandi is to have a team on the ground in each of the 11 countries where it is active to make sure it can be responsive and share knowledge. ‘We built a DHL parcel delivery platform at Bratislava airport in Slovakia, then the company wanted one in Prague and we could help with that, and now we are doing three more,’ said Worboys. ‘We cover three time zones in Europe and go as far East as Serbia and Romania. I am a huge fan of Romania, which has a highly educated workforce, low labour costs and a massive rise in parcel delivery services and car manufacturing.’

Being able to anticipate demand is another important element of a successful strategy, but being responsive to clients’ needs does not mean following them wherever they want to go, Worboys emphasised: ‘We are not in Turkey yet and we are unlikely to be there for a few years. We will not go to Ukraine and we will never go to Russia, but if clients are interested we will put them in touch with other developers who operate in those countries.’

The customer is king, as the saying goes, but landlords must of course balance tenants’ demands with shareholders’ expectations of good returns. In Worboys’ opinion, occupiers’ and shareholders’ demands are not mutually exclusive so maintaining a good balance is actually ‘not difficult’.

The panel agreed that the growth in ecommerce is unlikely to slow down anytime soon, and that parcel delivery services will continue to drive the demand for warehouses, especially close to urban centres.