Prologis has enjoyed strong growth in recent years. Now managing more than 800,000 square meters of modern logistics properties, continued Nordic expansion remains on the agenda. So how does a company in the logistics property industry grow responsibly? We asked Johan Nihlmark, Prologis’s market officer in charge of several large regions.
With his broad commercial role at Prologis Nordic—which includes the expansive Gothenburg region, Norrköping/Jönköping and the area around the E6 down to Öresund—Nihlmark is familiar with growth and market trends. “We want to grow because we’re still experiencing strong demand for modern well-placed logistics solutions,” Nihlmark explains. “E-commerce, in particular, continues to require more space for logistics.”
This growth strategy involves taking advantage of opportunities to expand the company’s portfolio, from acquiring land and developing tailored solutions to speculative construction and scrutinizing property portfolios that come up for sale.
Nihlmark says, “In areas where there is high demand and a shortage of land on which to build, it’s a case of demonstrating we are the right partner. In other regions where there’s no such shortage, our focus is on identifying the right business deals. We’re open to growing in any way, but it needs to be both sustainable and profitable.”
Land Acquisitions and Long-Term Investments
When looking for new areas of land, good communication and early planning with the municipality are essential. Many municipalities appreciate Prologis’s strategy for long-term investments. “Our investments have always had a long-term focus on ownership and acquisition. This is an integral part of our business model. We invest in technologically future-proof sustainable buildings, and the well-being of those who work in our properties is important to us,” says Nihlmark.
One major challenge in the growing logistics industry is the difficulty of attracting and retaining staff. To address this concern, Nihlmark explains Prologis’ approach: “We want to be part of the solution, so we develop properties with good working environments, including air quality, décor and staff space. A good service offering in the area is also important.”
An In-Depth Understanding of the Customer
Driving business forward in logistics development requires a breadth of knowledge beyond real estate. The customer’s needs and how to meet them is always a critical starting point. For Nihlmark, it is a matter of being a flexible, active problem-solver. He explains, “It’s important that we know our customers’ industries, their problems, how they think and how things fit together.”
Nihlmark offers the example of Valmet AB, which is moving its service center to one of Prologis’s properties on Hisingen, Sweden. The new property will be no ordinary warehouse—it’s a full-service center for manufacturing, upgrading and repairing large bulky boilers for the pulp, paper and energy industries.
Another example is Göteborg Opera’s new warehouse, also on Hisingen. The property provides logistical solutions for many challenges faced by the opera house. As well as being used to store scenery and props, it is also a workshop for building entire sets for the stage.
“If we have an in-depth understanding of the customer, we can identify unique solutions based on their specific needs,” concludes Nihlmark. “Then we can also face up to the competition and win more business.”