Opportunity

When choosing a location for logistics properties, Prologis considers numerous factors, including a convenient location and the availability of a qualified workforce. Prologis found a suitable site that met these criteria in Hamm, Germany. InlogParc Hamm-Bönen in the eastern Ruhr region covers a total of about 185 hectares with 85 hectares managed by the city of Hamm and 100 hectares managed by the municipality of Bönen. Prologis acquired a property measuring approximately 65,000 square meters.

The ideal location in the Ruhr region—which is plagued by a shortage of available space—proximity to numerous metropolitan areas with a high concentration of production companies and numerous skilled workers make InlogParc an attractive location. The property is zoned as an industrial area with a legally binding land-use plan. The location permits 24-hour operation and is well connected to the area’s transportation infrastructure.

Challenge

Many logistics real estate developers were interested in InlogParc Hamm-Bönen, which meant Prologis faced stiff competition to acquire the property. Prologis needed to impress the city of Hamm, the municipality of Bönen and the local population, despite the fact that the future tenants of the facilities were unknown at the time.

Solution

In order to win over the city of Hamm and its citizens, Prologis developed an innovative plan for a logistics facility within InlogParc. As the long-term owner of the facility, Prologis tailored the plan for flexible use. The city was impressed, and Prologis acquired the property despite the future tenants being unknown when construction began. Because Prologis’ vacancy rate in logistics properties is low, we opted to develop the site speculatively. “Our occupancy rate in Germany remains high,” says Alexander Heubes, senior vice president, country manager Germany, Prologis. “This is made possible thanks to our stable network of customers. That’s why speculative doesn’t mean risky—instead, it simply means that we adapt the development of the property to the needs of many potential users.”

Hamm’s business development agency supported Prologis. “We welcome logistics companies moving here,” says Karl-Georg Steffens, general manager of Hamm’s business development agency. “Logistics parks offer tremendous potential, especially for the job market.” The two companies provided the citizens of Hamm with detailed information well in advance and marketed the future logistics facilities together. Hamm offers ideal training and educational opportunities for the industry, thanks to the SRH University of Applied Science for Logistics and Economics.

Construction of the 35,000 square meter facility began in November 2016 and was completed in September 2017. Prologis leased all three of the speculatively developed warehouses before construction was completed: An international logistics service provider uses 11,500 square meters of distribution and office space for nationwide contract logistics for one of its existing customers; Borchers NordWest Warehousing Solutions entered into a lease agreement with Prologis for around 17,800 square meters; and the logistics facility’s third unit, spanning about 5,700 square meters, is used by a company named Umarex.

Lessons Learned

Close collaboration with cities and support from business development agencies created a foundation of trust between the municipality and Prologis. A detailed plan and the inclusion of the local community through transparent and timely dialogue helped the city and Prologis gain public support for the establishment of logistics sites, market the logistics space successfully, and thus further enhance the location’s economic strength.