ProLogis

Procurement policy
ProLogis selects contractors from a prequalified list to bid on a competitive tendering basis against a set of specifications and drawings. Occasionally it will negotiate directly with suppliers.

The company's preferred contractors include Fitzpatrick, McNicholas, Sisk, Ashford, Norwest Holst, Clegg, Weldon, Winvic and Birse.

Much effort is invested in managing the company's supply chain to achieve a consistent level of price, performance and warranty. This enables it to speed up the delivery of its product.

Standardisation and modularisation of building elements are key to this process and supplier performance is monitored on a regular basis.

Current and future projects
ProLogis is a major player in the UK's warehouse and distribution market. Capital expenditure figures for the UK operations are not available, although in terms of floorspace, the company completed about 200,000 m² in 2001 and it hopes to be able to sustain this level over the next few years. Due to the group's cash resources, speculative development plays a key role.

The company has a large supply of cash, which at present it is using to purchase land. Over the course of 2001 ProLogis invested £100m in land and negotiated deals involving over 300,000 m² of space. For 2002 the group planned to buy a further 170 acres of land across the UK. By spring 2002, ProLogis had 1.45 million m² of distribution space completed in the UK, while 453,000 m² was under construction.

The ProLogis strategy at present is to concentrate on buying brownfield sites. A recent example is the former Dunlop site in Birmingham where ProLogis arranged a sale and leaseback deal for Dunlop. ProLogis typically looks at acquiring large sites in order to develop megasheds. Site size will depend upon the location: in the Midlands 20 acres, in the South about four acres. The focus at present is the eastern area of London and the South-east, where land is more plentiful. The group's target market is rail freight, which the group sees as a major growth area over the long term.

Essential information
Earlier in 2002 ProLogis submitted a planning application for a 100,000 m² science park, including 75,000 m² of industrial/ warehouse space, 1500 homes and a hotel at Dartford Park in Kent. The site, which is near the M25, will require £50m of infrastructure works which ProLogis is committed to. ProLogis says there are several large industrial requirements in the area, and that the project will be progressed in two phases. J Sainsbury has been in discussions with ProLogis regarding the project.

Meanwhile, discussions with prospective industrial occupiers are progressing relating to 16,000 m² of speculative space currently being developed at Dartford. The scheme is due for completion May 2003. ProLogis also recently announced the acquisition of a 13.5-acre site in Barking, where it plans to speculatively develop 27,000 m².