“We try to choose land that is ready for building. And we make sure that our warehouses won’t be too disruptive to the surrounding areas; we speak to, and work with the local authorities, municipalities and public groups,” says P3 Logistic Parks Head of Construction CEE and CZ, Tomáš Kubín.
Now in his 11th year at P3, he has been in charge of the Central and Eastern European construction department for the last year and a half. We spoke to Tomáš about what P3 has to offer, what it excels at, what the future holds and why it approaches the world in a slightly different way than so many others.
So what does P3 actually do? What separates it from your average, every day, run-of-the-mill property developers?
We don’t build administrative buildings, shopping parks or residential buildings: we concentrate entirely on industrial real estate. These can have a fairly broad range of applications. Specifically, we build unique warehouses, manufacturing and partially commercial spaces; depending on the location, these could be retail warehouses. One excellent example is the P3 Prague Horní Počernice complex, where you can find everything from pure warehouses with an area of 50,000 m2 to small units where you can buy dog food, pick up a washing machine or even buy flowers, right next door to a manufacturing space that, say, makes all kinds of plastic piping. So even though our focus is pretty narrow, the possible uses are truly diverse.
"So we make sure our buildings are not only environmentally sustainable, but also in tune with these rapidly changing times as well as economically viable to operate."
Interesting. But let’s face it, narrow can easily equal dull, especially in today’s rapidly changing world. How do you see the industry changing, and what is P3 doing to keep up?
Innovations and modern solutions have always come somewhat later to industrial real estate. Despite this, we understand the importance of implementing new technologies, but only if they make economic sense and effectively service our clients’ needs, all while driving our buildings forward. So we make sure our buildings are not only environmentally sustainable, but also in tune with these rapidly changing times as well as economically viable to operate. We are trying to improve the standards in this field, though this takes place with small steps.
Can you give us specific examples?
I guess the most visible example is replacing old light bulbs or sodium lamps with LED lighting, which nowadays is a standard solution. Then we can tinker with the control systems to make them more sophisticated or try out all kinds of diodes for indoor and outdoor use. What’s more, it is fairly easy to calculate and to prove that the savings will be considerable. Another example is the heat insulation properties of buildings. We are the only ones who use a special type of loading dock as standard, in which the section gate is moved forward and in direct contact with the exterior apron or the insulated part beneath the dock. This design prevents large-scale heat losses when loading and unloading and stops cold air being blown inside.
How do you decide where you are going to build?
We advocate a fairly conservative strategy. We focus on a locations’ excellent accessibility, ideally close to major motorway networks. We try to limit any inconvenience to nearby residential areas as much as possible. We obviously listen to the requirements of our clients, which tend to be big logistics firms that create their own network to distribute their clients’ goods in the best possible way.
As far as industry is concerned, we choose places linked to industrial zones, which typically have a good connection by both road and public transport. That’s evident in Mladá Boleslav, where there are lots of production companies, linked to the Skoda automotive plant. So the choice is also linked to a traffic artery or industrial centre.
You mentioned you don’t want to inconvenience local residents. That’s not something we often hear in this rapacious world where warehouses are springing up at breakneck speed...
Yes, we pay attention to that – we don’t want to build inconsiderately. Our philosophy is to go to locations where the local town hall itself has decided that it wants to have a logistics or industrial zone in a certain place. Municipalities create their own zoning plans and we simply comply with them. So we don’t force ourselves on places where they don’t want us – on the contrary. What’s more, we try to buy land where planning permission, at least, has already been issued and go to places where the locals are informed about the development and its scale. We go and ask them: we’ve bought this piece of land and we’re going to build – what can we do to make your lives better here?
So you’re not interested in brownfield and blackfield sites, in bringing previously used but now defunct spaces back to life?
Yes, we are, very much so. In Germany, for example, we have a number of completed projects of this kind. In time, this will come to the Czech Republic and the greater CEE region as well. It depends on what sites are available and how willing society is to keep chipping away at the green belt. One day a time will come when the free space has been used up and brownfields start to become more interesting. But even the Czech Republic has regions where we basically don’t look for anything else any more.
How does the building process take place?
Quickly. (polite, slightly self-effacing laugh) As I said, we choose locations that are as prepared as possible, including the said permits. That’s why we are able to start building very quickly: as soon as we negotiate the terms of the deal with a new client and sign a lease agreement, we can start building. Others only start negotiating at that point, and a year can easily pass before they obtain building permission. That’s why we prefer to offer locations where everything has already been sorted out.
Who are your customers? How broad is the spectrum?
Very broad, almost infinite. For example: a tech company working in virtual reality recently became our customer – I’d never have guessed that we’d have anything like that in our warehouses, seriously. But of course most of our clients are large transnational logistics companies, followed by production firms, depending on the location, as I’ve already described.
Can you name some?
We did a really nice project for VF Corporation: a tailor-made, 60,000 m2 warehouse. The name might not mean much to you, but it’s an umbrella company for a number of very well-known, popular clothing industry brands, like The North Face, Timberland and Vans. The entire 60,000 m2 warehouse is exclusively for Vans. The project was interesting because it was tailor-made for the client’s requirements: from the building height to its interior fittings and gyms, canteens for 700 people and a sophisticated mezzanine system with conveyor belts which they installed themselves. I reckon it’s one of the most modern logistics buildings in the Czech Republic, which is also rated BREEAM “Very Good”.
We also have a wealth of experience with projects for major logistics companies like DHL or FM Logistic. In Romania we have Carrefour’s large central warehouse. And I shouldn’t forget the very interesting warehouses made for Lamborghini & Ducati or Airbus either.
What about the sustainability of buildings and their environmental impact when they reach the end of their service life? Do you pay attention to that aspect during the building phase?
It is considered, certainly. The advantage of warehouses is that they are relatively easy to recycle. There’s a lot of concrete, which is a natural material that is very easy to process and re-use in a wide variety of ways. There are also façade shells of mineral wool which is not a problem to recycle either. It’s relatively easy to recycle warehouses, in my opinion, especially when compared to office buildings or shopping centres. In fact we’re already experiencing that in Germany, where roughly half of the projects involve demolishing an existing old warehouse and building a new one. And we are finding out that the demolition is not a particularly demanding process.
Where is the industry heading, in your opinion? What will it look like in 30 or 50 years’ time?
When we look at the coming few years, we think there will be an upsurge in “urban logistics”. Big centres will probably move away from residential areas and distribution will be taken over by smaller-scale logistics. Today, we are all used to the idea that when we buy something online we want it delivered the same day, ideally. And that is very hard to achieve without smaller, more flexible logistics centres incorporated directly into the infrastructure of towns and cities.
What we can already see in the United States or Asia is a tendency to build these centres upwards. The less land that is available, the more valuable and expensive it is, so the more storeys the warehouses will have.
And as far as the more remote future is concerned, I can imagine warehouses built underground and serviced by ultra-fast backbone transport channels like Hyperloop.
FIVE REASONS P3 IS A LEADER IN EUROPE
Tomáš Kubín summarises the five biggest advantages that have put P3 at the top of its field:
1. STRONG PARTNERS
We own and operate our warehouses, so right from the start our outlook stretches a long way into the future. We are not only interested in the location, but also in the quality of the construction. That is why we only use stable and tried-and-tested general contractors which we know are going to be here with us for several decades. We have sophisticated control systems in the form of technical investors and a “peer review group” comprised of international experts who also make sure that everything takes place in line with our brief and the various technical standards, which differ from place to place.
2. EVALUATION OF CONTRACTORS
Besides working with general contractors, we also evaluate and approve their subcontractors. These subcontractors are under constant supervision, and if we find out that they don’t suit us for whatever reason or their work is not sufficiently good, we have the right to demand that they are replaced. And on top of that we don’t work with them again on any new projects.
3. WE OWN THE PROPERTIES
There are developers who want to build and sell at a profit without taking care of the property after that. We aren’t like that: we build with long-term visions and we stay with our buildings for their entire life cycle. That’s why we pay such attention to quality in the design phase – we are the ones who will have to pay for any errors and alterations.
4. OUR OWN TEAM
The previous point is linked to our own asset property management, which is the team that looks after our buildings. They are our own people, so we don’t need to hire external companies for that. Consequently, the warehouses receive the best possible care, because we just love our warehouses.
5. GOOD SITES AND QUICK CONSTRUCTION
We give precedence to sites that already have planning permission at least. This establishes some legal certainty that our project can be executed there and we also have certainty with regards to timing. So we know what we can offer the client, and we stick to it. We also cooperate with the largest and most trusted General Contractors, who bring a high level of quality and a systematic approach to each project.