Sustainability Accreditation the Logical Choice for Logistics

Several park developers and operators are seeking sustainability accreditation from a third-party specialist such as BREEAM, LEED or WELL across their entire portfolios. Tenants are looking to save on utility costs and reduce their carbon footprint. In this sense, similarities can be seen with office development and the need to adhere to environmental requirements and produce sustainable, well-designed, and highly-specified products in response to investor and tenant demands.

Prologis, Inc., the real estate investment trust headquartered in San Francisco, California, is developing in accordance with at least BREEAM “Very Good” accreditation for its entire regional portfolio in the Czech Republic, Hungary, Poland and Slovakia.

Tenants recognize the importance of staff wellbeing, green areas, good locations, changing facilities for cyclists and electric charging units. There is also a need to observe precautions following the coronavirus pandemic and to reduce the carbon footprint, according to the company.

“We have been following our crisis-proof strategy to be present and develop in key markets, but we are not only developers but also long-term owners and managers of our properties,” comments Zsuzsanna Hunyadi, leasing director at Prologis Hungary.

“Our industrial real estate expertise spans real estate operations, development services and sustainable development. We are taking care of our customers’ needs, their growth, and the local communities. Customer satisfaction has always been a top priority for us, to offer more than just a warehouse building,” she adds.  

Panattoni Budapest City West.

Lower Utility Costs

Prologis Park Budapest-Harbor, for example, provides a 30% reduction in heating costs, LED lighting and large skylights cut electricity consumption by 45%, electric car charging facilities, and direct public transport links, according to the company.

Sustainability accreditation from independent, third-party sustainability organizations such as the U.K.-based BREEAM or U.S.-based LEED, and increasingly WELL, is now the norm for the entire development cycle of an office project from concept to design to leasing to property management and finally, an exit strategy.

“This situation could easily be transferred to the logistics sector, as it is attracting investors and its buildings are less complex than offices, and therefore savings on energy are easier to achieve. In this way, branding through sustainability accreditation is an advantage in addition to savings on energy consumption,” said Pál Dános, head of real estate advisory and business at KPMG Hungary.

The Amsterdam-based CTP, whose portfolio spans eight million sqm of leasable space, making it the market leader in CEE and a top five developer in Europe, according to its LinkedIn page, is developing under the BREEAM in-use “Excellent” standard for buildings across its Central European portfolio. The company is emphasizing energy efficiency and solar panels in its portfolio.

Panattoni, headquartered in Newport Beach, California, but with development offices across the United States, Europe and Canada, has achieved BREEAM “Outstanding” accreditation for its park in Cheb in the Czech Republic.

The company aims to achieve emission neutrality for all its buildings across Europe by 2025 and is aspiring for at least BREEAM accreditation for its portfolio. The first development by Panattoni in Hungary, Panattoni Park Budapest City West, comprises four speculative logistics buildings with electric vehicle charging, enhanced wall and roof insulation, a water recycling system and LED lighting. The company is seeking BREEAM “Very Good” accreditation, with completion due in the third quarter of 2023.

Huge Opportunity

“We entered the Hungarian market because we see a huge opportunity to tap into the rising demand for modern, sustainable distribution centers,” says László Kemenes, head of Panattoni Hungary.

“With this development, we are focusing on occupiers seeking high-quality spaces in smaller-sized lots located very close to the city. Panattoni Park Budapest City West’s superior green credentials and exceptionally good location for transport connections will attract urban logistics operators targeting the large catchment area of this part of Central Europe,” he adds.

HelloParks, the industrial and logistics real estate development company of the Futureal Group, has 45,000 sqm of BREEAM accredited space under construction at HelloParks Maglód. The center has the capacity for a total area of 193,000 sqm of certified space.

“We use our own construction company in addition to some big names as sub-contractors. We want to develop buildings that are unique in terms of sustainability, services, and look and design,” comments HelloParks managing director Rudolf Nemes.

“If you go there, you feel the difference from other sheds, which are grey and not in a very attractive location, and we wanted to change this. What we are doing in each location is developing a project with several buildings, and the number of people working there will be several thousand; this is essentially a village,” he explains.

“We delivered the first warehouse in the Central European region to be awarded a BREEAM ‘Excellent’ accreditation. All the remaining buildings we are developing are going to be BREEAM ‘Outstanding’ New Construction. I do not think any buildings in the region have achieved this level of accreditation,” Nemes adds.

This article was first published in the Budapest Business Journal print issue of July 29, 2022.