Built on trust

Prologis has just been awarded a Great Place to Work certificate. So is it a really great company to work for?

Paweł Sapek, Central Europe senior-vice president and regional head of Prologis: Yes, and actually that’s not just my opinion. The certificate is awarded on the basis of a survey of the employees, so it’s based on objective information from people who know it best. The award is the culmination of many different factors and many years of activity in implementing the ESG concept, or, in other words, caring for the environment as well as social and corporate governance. Sometimes people forget that this acronym also stands for relations with employees, who may not be the most numerous but are certainly among the most important interested parties – without whom we wouldn’t have been able to build a modern company with such a significant property portfolio. We are even more pleased with the certificate because the last two years have been very unusual when it comes to people, culture, employee safety and well-being, when they have been more important than ever. Last year we also won the Ethical Firm of the Year award. This all goes to show that transparency and honesty in business are very important for our employees.

But it’s not as if the pandemic hasn’t had any impact on your business…

The last two years have posed a huge challenge for the real estate sector. However, it turned out that all of the changes that the pandemic either induced or accelerated were very beneficial to our business. The market is changing rapidly and we have seen investment leaving the large-format retail sector – and, to a lesser extent, the office sector – which has meant the rapid rise of the logistics real estate sector. The projections for its further growth remain very positive. However, this segment in Poland also has to face the challenge of rents not having risen. Throughout 2021, rent rises and property value rises were well below those seen in other European countries, regardless of the significance and buoyancy of the market. This disjunct is caused by the lack of transparency in actual market rents. Rents have to rise as a natural response to the rising costs of development and utilities and as a result of soaring inflation.

If it comes to that, how are you going to tell your tenants?

Just as usual – calmly, matter-of-factly, based on the numbers. We are very close to our clients and for many years we have been pointing out to them that the most important thing are the total operational costs of leasing and not the effective rent rates. With solutions such as Clear Lease, which is a simple contract model with a flat rate covering all the standard operating and maintenance costs as well as those for any repairs agreed upon and also with our professional management for purchasing utilities, we can limit the risks of rising costs. Our tenants appreciate our honesty and partnership approach in our relations. We regularly conduct satisfaction surveys among our clients and last year, which after all was not an easy time, we once again found out that satisfaction levels for our work had risen, which, when combined with a 90 pct retention rate for our clients, is a great source of pride for us.

What are you most proud of?

As usual, our team and the great relationships that we build up every day with our clients. I’m also pleased that we have had a record fourth quarter for our operations in Central Europe as well as a record year. Demand for logistics space is at a record high and the number of new projects, including BTS developments, continues to grow. We are expanding at the same rate on all our markets – in other words, in Poland, the Czech Republic, Slovakia and Hungary. Last year we launched eleven new projects and our portfolio was leased with a record high occupancy of 97 pct. I’m also very proud that Prologis provides the best properties in the most attractive markets. I’m a great optimist when it comes to the future of our sector and our company.

And what about your personal plans for the immediate future? Are you planning to take a break before the end of the winter?

This winter I’ve already been able to get away to the mountains several times for my favourite ski tours. Due to the uncertainty with the pandemic around the world, I generally haven’t been planning my trips in advance, but I hope that I will be able to see two tennis tournaments this year – in Rome and at Wimbledon.

Interview: Tomasz Cudowski