LOGISTICS REAL ESTATE AND WDP

INTERVIEW WITH CEO TONY DE PAUW

Warehouses De Pauw (WDP) is the market leader for logistics real estate in the Benelux and Romania and manages no less than 6.0 million m² of real estate spread over more than 250 sites at logistics hubs for storage and distribution in the Benelux, Romania, Germany and France.

The company focuses on the development and rental of sustainable, logistics and semi-industrial real estate.
WDP and Structura.Biz have been working successfully together for years. This well-founded collaboration is achieved through direct and rapid communication and a proactive approach.
Tony De Pauw, CEO of Warehouses De Pauw, spoke with Ann Verresen (Managing Partner) and Anneleen Deruyter (Head of Industry Flanders) about WDP’s growth plans, the future of industrial and logistics real estate and the importance of sustainability in the sector.

WDP’s growth plans

Warehouses De Pauw has big plans for international growth without losing sight of the company’s home base, the Benelux. For short-term expansion, the focus is primarily on abroad, where there are still plenty of opportunities.

“Our target for 2025 is to grow our portfolio by €2 billion to €8 billion. At the same time, we also want to increase earnings per share (dividend per share) by +8% annually by 2025.”
 according to Tony de Pauw

In addition to further structural growth in the existing Benelux and Romania markets, WDP has the ambition to continue to grow in both France and Germany. We will also soon be opening a second office in Romania. At the beginning of April, WDP acquired a strategic partnership with the Swedish company Catena. With this strategic collaboration, Catena and WDP aim to achieve a broader geographical spread for their clients in order to also be able to offer customer service in the regions between those in which both companies are currently active, thus optimizing their clients’ goods flows.

Developing strong local structures is key to successful future growth. WDP collaborates with local people on its international projects. For example, the office in Romania is staffed by around thirty local employees.

Each country has its own property managers and lawyers, but synergies are maintained by working together digitally as often as possible, but also physically. The connection between the various national teams is extremely important.

This physical collaboration has been hampered in recent years by the global health crisis. Nevertheless, WDP weathered the pandemic well. During this period, it became clear that logistics is an important aspect of our global economy.
As a result, this type of real estate gained importance in 2020 and 2021.

The challenges for WDP and the real estate market

One of the main obstacles in the market is the rise in raw material and land prices, De Pauw points out. There’s also uncertainty about material delivery times due to logistical challenges.

This not only increases the construction price, but also the rental price. Prices for a large logistics project in Brussels quickly rise to around 70 EUR/m²/year. For smaller surface areas, this sometimes even goes towards 80-90 EUR/m²/year.

The company also notes that it is becoming more difficult to find available land in the Benelux. There is also a clear shortage of industrial real estate in our neighboring countries, primarily Germany and certain regions of France. Moreover, regulations and a number of administrative restrictions are increasing.

In contrast, market conditions during the 2020-2021 period led to change, and logistics real estate became even more important than before. An interesting shift towards and increasing interest in logistics real estate is creating tangible competition for WDP.

Warehouses De Pauw distinguishes itself through digitalization, the importance of sustainability and by creating and maintaining long-term relationships.

Sustainability as part of the business strategy

Sustainability is no longer a trend, but is an integral part of WDP’s strategic business operations, says Tony De Pauw. There is a strong emphasis on making the company as a whole more sustainable. Moreover, WDP wants to clearly distinguish itself on the real estate market based on sustainability and make a real difference in the sector.

For example, the head office in Wolvertem sources its energy from geothermal energy and makes it as sustainable as possible.
WDP is therefore exploring obvious solutions within its portfolio, such as solar panels and LED lighting.
They were one of the first players to strongly believe in the potential of solar panels and have therefore invested heavily in this technology. WDP currently has 100 megawatts of solar panels in place. The goal is to increase this green energy potential by a multiple of that. In the Netherlands, WDP is going a step further, as the company is operating without gas.

In addition, the location of the buildings plays a crucial role in the sustainability aspect. Macroeconomic factors, such as the global health crisis and the current war in Ukraine, are causing e-commerce to boom. The demand for storage spaces close to cities to limit transport and the demand for larger storage spaces to avoid stockouts and guarantee supplies is increasing.

Here too, WDP goes even further. Sustainability is given high priority throughout the entire stakeholder chain. Partners, clients, contractors and others are subject to various sustainability requirements. For example, they are asked whether sustainable concrete is being used and to what extent construction waste and materials are recycled. This will be increasingly important in the future.

In addition to sustainability, creating (added) value for clients is also important. WDP does this not only by improving the sustainability of its buildings and focusing heavily on green energy, but also with the help of digitalization.

Customers gain insight into their consumption thanks to a personalized digitalization app, ‘MyWDP’. With the help of this application, customers can quickly and efficiently monitor their consumption and contribute to the sustainability aspect. In addition, the customer can easily consult rental contracts and real-time rent indexation via the app.

An eye for personal growth and a family atmosphere

WDP is a professional company while maintaining a family atmosphere. The personal and professional growth of employees is central. This is facilitated by, among other things, developing a training plan. And, of course, regularly rewarding employees who achieve their goals is a must.

This is clearly paying off, as WDP scores a strong 8 out of 10 on Employer Satisfaction.

Partnerships in (international) real estate

Creating long-term collaborations and high-quality partnerships are important, De Pauw indicates. Cross-border relationships also play a huge role. For example, WDP works with Carrefour in Belgium, but the company also leases properties to Carrefour in Romania. These collaborations create a bond, ensure higher quality for both parties, and are also very satisfying.

The criteria on which long-term partnerships are based are clear to De Pauw. For him and WDP, drive and correct conduct are especially important. This is the basis for building lasting partnerships, as is the case with Structura.Biz, he says. WDP attaches great importance to the broker-advisor doing their work correctly and being driven.

The collaboration between Structura.Biz and WDP

WDP and Structura.Biz have been working together since 2001. Structura.Biz therefore knows exactly what is important to WDP and also knows how to provide added value. Structura.Biz and WDP share the same passion for real estate, proactive work and family character, which makes it easy to collaborate sustainably.

At WDP, Tony De Pauw, together with his family, is a reference shareholder. The company always strives to project a professional image, while maintaining a strong sense of family and atmosphere. Structura.Biz also highly values ​​this family atmosphere, which contributes to the smooth collaboration between the two companies.

CEO Tony De Pauw indicates that the collaboration with Structura.Biz particularly appeals to him. Even though these two companies have been working together for more than two decades, the business relationship shows no signs of wear. De Pauw mentions the recent projects in Anderlecht (Deleers site of 20,500 m²) and Mechelen, that WDP achieved together with Structura.Biz, as some of the finer achievements since the beginning of the collaboration.

Facts & Figures

• Total land area (incl. land in concession) has tripled since 2014 and results in 2021: 14,911,239 m²
• Fair value of the real estate investments (incl. solar panels) in 2021: 6,054.3 (in millions of euros)
• Lettable area in 2021: 5,931,807 m²
• Real estate result in 2021: 278.4 (in millions of euros)