Helping Customers Thrive

The flow of goods through Prologis buildings represents 2.5 percent of global GDP—and an estimated 4.4 percent of global household consumption. These statistics underscore how the pandemic magnified our essential role in helping our customers meet the basic daily needs of consumers. 

Even at the onset of the pandemic, the vast majority of our customers stayed open for business. Our customer experience teams set up a steady cadence of virtual check-ins to understand needs in real time, and our operations teams leaned into longstanding supplier relationships to give customers care packages of gloves, disinfecting wipes and hand sanitizer.

Moreover, we launched a comprehensive digital transformation initiative to improve operational efficiency through the deployment of flexible technology solutions. Our Prologis Essentials Marketplace is an online platform that offers goods and services curated specifically for our customers. This portal taps into our unmatched purchasing power and scale to help our customers procure forklifts, conveyors, robotics and janitorial services at favorable rates.

Responding to the Pandemic

In early March, our actions centered around our employees, customers and communities.

Keeping Employees Safe

As always, the safety and well-being of our employees and their families is our top priority. Our early investments in technology and data infrastructure allowed us to transition quickly to remote working to comply with stay-at-home ordinances. Our property management and maintenance teams continued to perform standard property inspections, but only under strict safety protocols.

Our crisis communications plan included the rollout of an information portal on our company intranet where employees can access up-to-date information and weekly video updates from our senior leadership team. In addition, we formed a COVID-19 task force that met daily to assess business risk. We continue to follow regulations and guidance from governmental authorities regarding the containment of the coronavirus, as well as parameters set by the World Health Organization, Centers for Disease Control and Prevention, and other public health organizations. 

I am extremely proud of how our people have rallied to take care of each other and our customers.

Committed to Our Stakeholders During Unprecedented Times

As COVID-19 began to batter communities across the globe, we were ready. We mobilized our teams quickly to help our customers, communities and employees, working day and night to establish a fast-tracked structure for how to best deploy our resources to support those in need.

Customers

• COVID-19 RELIEF CENTER: 24/7 support for our customers.
• PERSONAL PROTECTIVE EQUIPMENT: sourcing hard-to-obtain safety gear.
• PPP¹ TOOLKIT: made available within days of legislation to help customers understand the resources available to them.

Communities

• $5 MILLION global relief fund launched by the Prologis Foundation in 2020 to help charities around the world mitigate the impacts of the pandemic.
• $9.3 MILLION of in-kind logistics space donated to municipalities, hospitals and relief organizations on the frontlines of the COVID-19 response.

Employees

• SUPPORT BENEFITS: ensure that employees have ample access to resources such as telehealth, free testing for COVID-19, quarantine pay and childcare.
• 0% INTEREST LOANS: offered to non-management employees whose household incomes were impacted by the pandemic.

Investors

• RAPID ANALYTICS AND INSIGHTS about our response plans and the impacts of the pandemic on logistics real estate in six special reports over four months.
• THOUGHT LEADERSHIP through such research as our collaboration with MIT on the sustainability impacts of e-commerce vs. retail.
• 34% OUTPERFORMANCE over MSCI REIT Index during the pandemic.²

Underscoring the Need for Resiliency

Prologis Research, the only in-house research division in the REIT space, takes proprietary data gathered from our facilities and places that data into context with conversations with leaders across multiple sectors. This approach ensures that our customers and the financial community receive real-time insights into our business. As the pandemic unfolded, Prologis Research published a three-tiered analysis of the economic impact of COVID-19, breaking the pandemic into distinct phases: Stay-at-Home, Recovery and New Normal. 

During the Stay-at-Home phase, demand surged in large customer industries such as food/beverage, diversified retail, consumer products and transportation/distribution. In the Recovery stage, customers who adapted to new patterns of consumer behavior are increasingly focused on optimizing their supply chains for the New Normal, which in turn requires a reassessment of ideal inventory-to-sales ratios. Historically, customers that serve essential and basic daily needs have outperformed during recessions.

We anticipate continued fundamental improvement in 2021 and beyond as our customers plan for the long term. In fact, we estimate that 400 million square feet or more of additional U.S. logistics real estate demand will be realized in the next two to three years as companies adjust to two primary drivers. First, the pandemic accelerated the retail revolution. In 2020, the e-commerce penetration rate jumped 480 basis points to 20 percent of goods sold in the U.S. While we expect the share of goods purchased online to grow, a pause later this year would not surprise us, as consumers pivot to services and experiences versus goods. Second, we expect higher inventory levels. Inventory-to-sales ratios remain near all-time lows. We see early signs of inventory restocking: Containerized import volumes in the U.S. rose 21 percent in the fourth quarter and set a quarterly record high. Longer term, the need for more resilient supply chains will prompt increasingly robust inventories.  

Despite the uncertainty that prevailed in 2020, investment activity across our global platform was unabated, reflecting strong demand for high-quality logistics real estate in the world’s best locations. Our portfolio and development-ready land bank near large population centers is a proven competitive advantage for Prologis customers.