Prologis CEO: A Candid Interview at 2017 INREV Annual Conference
On April 5, 2017, Prologis CEO Hamid Moghadam participated in a session called "Logistically Speaking: A Lifetime of Fulfillment” at the annual conference for the European Association for Investors in Non-Listed Real Estate Vehicles (INREV) in Berlin. Before an audience of about 450, Moghadam had a fireside chat with Anthony Hilton of The London Evening Standard and The Independent.
Topics ran the gamut from strategy to diversity. Throughout, Moghadam answered audience questions about the logistics industry in different regions of the world, his management philosophy and how technology will affect logistics. Here’s a glimpse of the interview.
1:36 Early Impressions
Hilton asks Moghadam about getting his start in real estate in the U.S. in the 1980s as a young Iranian during the Iran hostage crisis and a huge real estate slump. The affable CEO explained that despite the political climate, Americans were generally very accepting. He quipped, “Once people figured out what my name was (and that was difficult), they remembered it!”
3:36 Starting out in a Rough Climate
Moghadam talks about how he and his partners got their start in the down market of the Eighties with no money and limited experience and built the company that is now the global leader in logistics real estate by transitioning from an advisory business to a fund management format.
5:55 Becoming a Global REIT
How the business has evolved in terms of product (moving away from office and retail to focus on logistics), with an early eye on e-commerce and fund management.
10:17 Going Where the Customers Are
The CEO talks about Prologis’ visionary strategy of locking up positions in high-density areas near the products’ end users.
11:47 What’s in Prologis’ Secret Sauce
Prologis leverages its scale to create value above and beyond NAV. A building, as part of a big, scaled network, if ran right, is much more valuable than that building on a free-standing basis, as you can offer the customer options for expansion.
The biggest area of creating sustainable competitive advantage however, is corporate culture. The balance between providing structure as well as a sense of empowerment among employees to think about how to get faster, how to make decisions quickly. Moghadam talks about his job as leader is to make sure that they have the freedom and the culture to do that.
24:00 Time, Location and Information
Distance and transportation costs will become increasingly less important than how long it takes to get goods to consumers. The closer you are to the end customer, the more valuable your logistics property will be. Scale allows us to know things about our customers’ industries—often before they do.
36:53 Regional Logistics Trends
Moghadam talks about the state of logistics real estate in Prologis’ various regions across the globe as the sector continues its recovery.
The single most important opportunity for logistics real estate providers of scale is the ability to inform the customer about their own needs by spotting trends about their sector in our data.
For more information about the INREV Annual Conference, please visit: https://www.inrev.org/component/content/article/131-newsletters-special-announcements/annual-conference-2017/5060-navigating-uncertainty-in-berlin