Sense and sustainability

Rafał Ostrowski, ‘Eurobuild CEE’: Does sustainability make sense beyond corporate social responsibility? Are viable revenue streams possible with this approach?

Michal Vrba, vice-president, head of project management, Prologis CEE: The role of sustainability in industrial development is growing all the time and, in view of the global trends on climate and in politics, we are paying particular attention to it – especially for the future. We are looking to maximise the sustainability of all of our facilities. For example, building 18 at Prologis Park Prague-Rudná was awarded a BREEAM ‘Outstanding’ accreditation last year – the highest of its kind in the Czech Republic. The sustainability features in this case included the recycling of used building materials, the reduction of its carbon footprint, adherence to strict regulations for the conservation of natural resources and the surrounding area, a focus on recycling construction waste, energy-saving LED lighting to reduce energy consumption and operating costs, intelligent metering systems and a reduction in the daily water consumption of the buildings. Our second BREEAM ‘Outstanding’ certification was achieved in May this year for building 3 at Prologis Park Prague-Airport. This is a very special facility. All the design decisions were supported by energy modelling, while a thermal comfort study was carried out to optimise the well-being of the building’s occupants, who enjoy plenty of natural light, fresh air delivered via openable windows, low noise levels and low pollutant contents in the materials that have been used. The building materials and interior installations were chosen on the basis of life-cycle cost analyses, which take into account the purchasing costs of the materials as well as the operational costs for the entire lifetime of the materials, including the cost of their disposal. Prologis uses materials that are recycled or contain a high amount of recycled materials whenever it can during the construction process.

Sustainability is a popular topic at the moment and it looks like every company wants to present itself as environmentally friendly. What are the mistakes to avoid in this approach?

Sustainability is a huge trend these days, as you say. The most common mistake is that companies don’t think about it properly – they just follow the current trends and do what’s nice from a marketing point of view, not what has a real green and sustainable impact. I would recommend doing less, but more effective things as we do at Prologis, rather than lots of stuff that’s just “nice and attractive to talk about”.

Green certificates were not so popular in the warehouse sector a couple of years ago. What has changed since then and what’s the reason for this change?

Customers’ interest in sustainable development has been constantly increasing. Businesses are becoming increasingly aware that a smart, sustainable approach can bring them significant operational savings as well as the advantages of being a good neighbour and corporate citizen. That’s why we strive to develop the most user-friendly and comprehensive systems, one example being the mobile app connected to our smart metering system, which enables customers to check and manage utilities easily in the operations of their premises. Sustainable solutions also help us create a pleasant working environment that can help companies hire and retain a qualified and satisfied labour force – for example, we put a lot of emphasis on providing plenty of fresh air and natural light in the facilities as well as greenery and leisure areas in the surrounding space. From a long-term investor’s point of view, sustainable development is a vital path to securing the permanent value of the assets. While standard lease agreements are usually signed for five- to ten-year terms, we need to look beyond that and consider the needs of future generations of our customers. We need to always be ahead of what’s next, which means we also know it’s not all just about sustainable solutions but also that people matter as well. There’s a new standard of certification available for logistics real estate today – Well Building certification. Our Prologis DC5 facility in Tilburg in the Netherlands has become the first fully-fitted warehouse worldwide to achieve the standard of Well ‘Gold’ Certification. In fact, it’s one of only two logistics buildings to have ever achieved Well certification so far. While many building rating systems focus on the environmental performance, the Well Building standard focuses on social-sustainability through building design and management – all with the goal of enhancing the health and quality of life of those in the built environment. In other words, we are committed from the start to putting people at the centre of industrial design thinking.

What kind of customers or companies typically ask about green solutions?

It was big international companies that initially appreciated sustainability; however, we are happy to see that local companies have followed suit and are interested in easy and smart solutions, not only in the buildings themselves but also in the development process.

Why has Prologis taken the effort to certify two warehouses in Europe with a BREEAM certificate at the highest ‘Outstanding’ level? What does this really change and how much effort does it take to receive such a rating?

International standardised systems have been proven to confirm the level of sustainability for the user. Prologis makes sure that all its new developments undergo the BREEAM accreditation process, not only in the Czech Republic but everywhere in Europe. In our experience, customers fully support these initiatives, as they are becoming more interested in sustainability all the time. And since it makes their operations more efficient, sustainability represents a good long-term investment. Considering how complex the process of BREEAM accreditation is – taking place at a number of stages in the buildingʼs life-cycle, from the design and construction through to the operation and refurbishment – we are extremely proud of receiving two ’Outstanding’ certificates: for building 18 at Prologis Park Prague-Rudná and building 3 at Prologis Park Prague-Airport. The ‘Outstanding’ rating is the highest level available, requiring a score of 80 pct or higher. We believe it is a clear signal to our customers that we care about our developments over the long term, therefore we work closely together with BREEAM representatives on further implementation and future development. Secondly, to be awarded ‘Outstanding’ accreditation places demands not only on us but on our customers as well. Co-operation with them is crucial.



Prologis Park Tilburg DC5

We sometimes hear about passive buildings, which require very little energy for heating or cooling. How does this idea relate to industrial buildings?

I would explain it by using one example from our portfolio. Our build-to-suit facility for Sportisimo at Prologis Park Prague-Rudná is designed to meet the highest standards of lighting, heating and cooling during continuous and heavy use. The building’s energy-efficient indoor environment is controlled with operable windows and an overnight cooling system in its large warehouse space, designed to take advantage of the high ceiling and natural air-flow patterns. Heat for the large storage space is supplied by infrared gas panels with electrical radiant heaters in the smaller office spaces. With blower door tests and thermal imaging, we are able to check the building’s airtightness levels to ensure the highest degree of efficiency. Another example is building 3 of Prologis Park Prague-Airport. The design provides significant operational savings, like an 83.5 pct reduction in waste drinking water thanks to its state-of-the-art water management, advanced leak detection system and the introduction of rainwater recovery. Energy consumption has also been reduced, by as much as 54 pct. The facility’s offices are equipped with a unique heating system, powered by custom pumps to heat the floors. The air-conditioning recuperates warmth through a method known as heat recovery ventilation, which also helps increase the well-being of our clients’ employees. In general, developing sustainable industrial facilities is much more challenging than sustainable residential development.

Prologis has installed solar panels onto their warehouses with a total energy generating capacity of 186 MW. Do you have any targets for further growth of this capacity? What is the future of solar energy usage in the warehousing sector in your view?

The greater adoption of large solar panels will contribute to meeting rising electricity demand and reducing the costs generated by operating logistics real estate. However, the technical complexity of this technology means that it will take some time before such solar panels can be used on a large scale. But with the technological progress that we have already made, we can store energy and use it later, for example, to light the premises or power the back-up systems.

Do you see any potential from using other renewable sources of energy in warehousing, such as wind power or heat pumps? What is Prologis’ approach to other renewable energy sources?

Absolutely, we do. Technological progress will have the final say – on the form this takes and how fast the progress will be. It’s highly likely that there will be a surge in the number of logistics facilities that use alternative energy sources in their day-to-day operations. The entirety of the office premises of the building has been fitted with heating pumps and floor heating in a one-of-a-kind heating system. The indoor environment can be controlled and laid out in certain ways – the daylight and artificial lighting intensity can be controlled by outdoor blinds and switches, and the fresh air volume and internal temperature by openable windows, thermostats and cooling unit controls. We can reuse the water in the system and there is huge potential in reusing energy as well. Instead of cooling down the machines that are used by our clients, the existing energy can be used elsewhere. People generate energy as well, so why not use it and send it back into the grid, as sort of a heat exchanger? Up to now, some systems have been regarded as being difficult to introduce, but technological progress should speed up their implementation. Sustainable buildings are likely to follow certain trends in the future, one of them being, for instance, the increased expectations of consumers and the value of time.

What do ESG – or environmental, social and governance – factors mean to you and what ESG policies has Prologis adopted?

ESG is very important to us. As a testament to our ESG leadership in this sector, Prologis has committed to a science-based target, or SBT, to address the urgent action needed to curb climate change. Led by the Science Based Targets Initiative, SBTs are an internationally recognised approach for helping companies draw up science-based goals for reducing greenhouse gas, or GHG, emissions. Prologis is committed to reducing absolute scope 1 and 2 GHG emissions by 21 pct by 2025 and by 56 pct by 2040 from the base-year of 2016. We are also committed to reducing absolute scope 3 GHG emissions by 15 pct by 2025 and 40 pct by 2040.

How do you at Prologis see the role of the project manager? How can they help your customers take the right decisions related to sustainability, and when does his or her role end?

The project manager has a huge impact from the very beginning of each project, right from the land acquisition phase and design stage. They can have an effect on about 80 pct of future costs and the efficiency of the project, including the costs related to environmental measures, which are usually quite expensive. A good project manager helps and guides his or her customer to find effective solutions that help reduce their investment costs while maintaining their targets. ν