Smart Property Management

Property management
Prologis CEE is one of the few real estate owners and developers who include smart-metering as standard. Renata Michalczyk, the vice president and head of property management for Prologis Europe, explains why it is the company’s policy to invest in high property standards and why providing such quality of management is the key to success.

Rafał Ostrowski, Eurobuild Central & Eastern Europe: Is the fact that a Polish person is now responsible for real estate management for the whole of Europe confirmation that our region is of particular importance for Prologis?

Renata Michalczyk, vice presidentand head of property management in Europe, Prologis: Our market is extremely competitive and difficult at the same time. The fact that we have had many successes in Poland has certainly been recognised across Europe. Our approach based on openness and understanding the customer’s needs works not only here but also across Europe.

How is it possible to operate effectively on such a competitive market?

Competing on the basis of prices is very difficult in this region and I think that each company must specialise. We focus on the quality of the product and customer service, that is, the management of our properties. Those customers who take out long term leases are increasingly insisting on the highest standards of cooperation.

Are your CEE standards higher compared to most of the others on the market right now?

They definitely are. We invest in many of the latest solutions to improve the comfort of property usage. This can involve smart-metering or LED lighting, for example. Many of the new solutions available on the market have already been successfully implemented by us. This does not just mean the installation of new systems in buildings but also applies to the tools that support property management. We are a long-term investor and our strategy is markedly different from that of different kinds of developers. Owners whose aim is quick construction, leasing and then selling will not be interested in such investment.

How does smart-metering work and what is it used for by tenants?

Each customer can have an ongoing analysis of their water, gas and electricity usage as well as the costs this incurs. This helps them when budgeting their operating costs and is useful for optimising the consumption in individual zones. This tool can also serve as the preventive malfunction detection system for installations and other devices. The reports indicate which parts of the space leased by the tenant are using too much electricity compared to others and it is then up to the property manager and the customer how they go on to use this information. We can provide advice on the best solutions, as we are here to support our customers at each stage of their occupancy.

Lets come back to the market standards. Which technological innovations can tenants expect to find in the newest buildings on the market and what improvements can be found in a building that is already in operation?

As I have already mentioned, there are many new technologies that can be used to improve the functioning of a facility, but the actual market standard for speculative developments only goes as far as the LED lighting. Of course, things are different when it comes to BTS buildings – when a project is tailored to customer’s needs. From this perspective I think that existing facilities are an interesting option for all companies looking for space to lease, because they are already equipped with additional building installations, such as alarms, monitoring and temperature/humidity control. Furthermore, if the owner wants to give the facility a competitive edge, they need to continue to invest in such enhancements, ensuring improvements that impact quality and services.

And which new technology is emerging that is not included in this standard?

Automatic licence plate recognition systems have been getting more and more popular, as they provide full access control, including parking space management. Due to fire safety regulations, a limited number of vehicles can enter a park. Furthermore, the system can be combined with a transport notification system, which can be individually managed by the customer. It is also worth pointing out that a monitoring system for the weight of snow on the roofs is now available, as well as all the other systems designed to protect the facility, such as advanced CCTV or what is known as the ‘electronic register’. The dock-in system, which allows the gate to be opened only when a vehicle is docked, is also worth mentioning. This system provides full security for loading and unloading and, interestingly, contributes to a reduction in heat or cold loss during the opening of the gate. Prologis has been interested in these and other solutions that contribute to optimising and streamlining for a long time now.

You are also carrying out pilot programmes to test the various systems. What can you tell us about them?

We are open to all solutions. Some innovations from other property sectors have come to our attention and we are testing many of them, but I cannot go into any of that just yet. But I will say that it is the customers who decide what becomes our standard. It is clear that the approach we have adopted is the right one: open communication with the customer, understanding their needs and sharing our ideas with them. At the end of the day it’s not all about installing something technologically advanced that isn’t actually of any use to anyone. There are such properties where total access control to the park is needed, but there are others where it actually doesn’t matter. So it’s important for the standards to be tailor-made and designed for responding to any issues in a given property.

What are the benefits of having a large real estate portfolio?

The economy of scale is of course our strength and our portfolio of 17 mln sqm of warehouse space in Europe gives us a definite competitive advantage. We use it in many ways. Firstly, when verifying offers for various services, devices and utilities. We have the comfort of deciding which supplier to use and the extent to which we will use it – to provide the most competitive offer for our customers. Sometimes it is worth using the services of a local supplier – and sometimes a globally delivered solution is better. Secondly, our economy of scale is used by us when working with customers, particularly those we also work with elsewhere, so that improving the standard of services in one facility means we can also improve the standard in all of the customer’s locations.

But a large company is also bureaucratic and slow to make decisions, isnt that right?

It’s not the case with us. Our property managers are fully empowered to make their own decisions in terms of the management of their parks. At Prologis we put a lot of emphasis on the dialogue and partner relations. Thus, in spite of our scale we can react to customers’ needs quickly.

Do todays tenants care about different things than they did a few years ago?

Our customers are paying more and more attention to the working environment in their leased units. Safety comes first with us – for example, in terms of having the right layout for footpaths within the park. Another element is the surrounding area, such as the landscaping, where employees can spend their breaks. Making bicycle racks and food trucks available has been popular for some time. And now it is even possible to play football matches in a few Prologisparks in the CEE region. Last but not least, we work together with our customers on other general projects such as organising employees’ transport to our parks.

What in your opinion is the key to good property management?

Mutual understanding is of key importance. Customers do not like surprises, thus we put a great deal of emphasis on cooperation and ongoing contact. At the very beginning of their lease, when a new customer takes over his new space, we try to smooth this process through open communication about the standard procedures in the park and helping with any of the formalities. A property manager has to understand the customer’s business problems. They have to be able to react to their needs and provide the most effective solutions possible. The reaction time to customers’ requests is also not without importance. Most of all, it is worth focusing on preventive activities rather than waiting to put out any proverbial fires when they happen. The majority of the work in the park can be planned without any inconvenience to our customers and if for some reason we cannot avoid disrupting their operations they are informed about it in advance. Our utmost priority is to support the operations of our customers and to our great satisfaction our customers do appreciate this approach.