Opportunity
The online retailer AO hired Prologis to build a new distribution center. In Bergheim, Germany, west of Cologne, Prologis acquired 84,000 square meters of land for the new building, where the municipality required that new jobs be created at the site.
Challenge
The Ruhr area is Germany’s largest logistics hotspot, so it is a challenge for companies to find new locations in and around Cologne, simply due to lack of available space. Finding a site sufficient in size for AO’s distribution center was a particularly difficult task for Prologis. In addition, the online retailer needed the facility to be planned and built quickly in order to expand in continental Europe as rapidly as possible. Prologis could only acquire the ideal property for this purpose in Bergheim if it met the previous owner’s requirement that the tenant of the logistics facility create employment. Many jobs had been lost in Bergheim with the phasing out of coal mining.
Solution
With Prologis and AO, the city of Bergheim gained the prospect of a new, high-quality logistics center in the region. Two adjacent properties in Bergheim were for sale: 30,000 square meters owned by the city of Bergheim and 54,000 square meters owned by the utility company RWE AG. AO promised the city it would create a place for a large number of qualified employees to work, which is one of the main reasons the county seat of Bergheim and the local business development agency supported Prologis and AO setting up operations.
By the time the site opened in October 2016, AO Germany had 300 employees with approximately 180 from the Bergheim region. The new European headquarters have the capacity to employ additional workers, up to a maximum of 2,500. The facility also has supplemental space that can be developed at a later date. AO’s new European headquarters is one of the largest investments made in Bergheim in recent decades.
Lessons Learned
Thanks to decades of experience working with municipalities, Prologis knows what’s important to regional business development agencies and the local population. By building logistics facilities, Prologis creates workplaces for employees from around the region, which is why many municipalities support Prologis in establishing logistics sites.