ZAL PORT r4

ZAL PORTTHE SUSTAINABLE BUSINESS REVIEW

22 23Quarter 4 2016 - The Sustainable Business ReviewThe Sustainable Business Review - Quarter 4 2016

ZAL Port:JEWEL

OF THE IBERIAN PENINSULA

ZAL Port is one of a handful of legacy projects associated with the

Olympics that has fulfilled its mandate to create economic and social development. The company was created as part of the

infrastructure development for the 1992 Olympic Games

staged in Barcelona.



The ZAL modelIt is the first port logistics platform established in Spain and the success of its development model

is internationally recognised as best practice. As a result, the use of the term "ZAL" has grown

from being a name in itself to becoming a generic name in reference to this type of platform. The

company has capitalised on this recognition and accelerated the promotion of the "ZAL brand".

As part of the rebranding strategy it underwent a name change as well as a logo redesign which

has been welcomed by stakeholders. CILSA - the company that manages the port concession in

the Logistics Activity Zone (ZAL Port) in the Port of Barcelona – is a recognised trendsetter in the

sector which promotes the concept of a true logistical hub. Due to the importance of the Port of

Barcelona for the company and its location, the word "Port" has been added to its brand name

allowing the market to easily differentiate it from other port logistic developments in Spain.

Alfonso Martínez the General Manager of CILSA spoke to SBR about what

made ZAL such a formidable success. He said that the ZAL Port offers

land and innovative and sustainable logistic warehouses for rent in an

intermodal environment with design and quality finishes. It has AAA

warehouses that are not available anywhere else in the territory

of Barcelona. Moreover it is located in a prime area very close

to an attractive consumer market and is well connected with

their overseas markets via sea links, a railway connection

and direct interconnection with a network of motorways,

it is near the airport etc. Facilities include 24/7 security,

maintenance and cleaning services.

It achieved the best economic performance

in history, registering a total revenue of €41.8 million

ZAL PORT


THE SUSTAINABLE BUSINESS REVIEW

Some

performance highlights:• In 2015 the procurement of logistical areas in Catalonia

increased by 67%, reaching almost 550,000 m² compared to

the 330,000 m² in 2014.

• It achieved the best economic performance in history,

registering a total revenue of €41.8 million, increasing its

EBITDA by a 17.1% reaching €21.5 million with a Net Result

of 51.4%, reaching €5.9 million.

• An average occupancy of 96% in the logistic warehouses

throughout 2015 and a 97% occupancy rate at the end of the

year

• Procurement of 131,000 m², of which 30,000 m² were new

contracts and 101,000 m² renewed contracts.

Bold plan to divert the mouth of the Llobregat River

The final stretch of the river Llobregat, which

was at the time located between the two areas

of the ZAL Port (the first phase of Barcelona

and its expansion in El Prat de Llobregat),

presented a serious problem to its plans

for expansion. At the time the Port was

undertaking the biggest enlargement in its

history and development was hampered

by the position of the river which:

• Formed a natural boundary south of the

Port of Barcelona at that time and therefore

became an obstacle to its growth; and

• Problems connected with the hydraulic capacity

which regularly arose in its final stretch during periods of

heavy rain.



As part of its expansion, the Port of Barcelona embarked on a bold

plan to divert the mouth of the river to the south to take advantage of the improved hydraulic capacity. With this diversion, the Port of Barcelona was able to plan the future multimodal railway station along the old Llobregat riverbed.

The diversion of a river causes significant

effects on the territory which it used to cross

and it had to deal with:

• The natural drainage systems and the surface

and groundwater hydrology in the diverted

section as a whole had to be modified;

• The effect on all the rainwater drainage

systems which poured into this stretch of

the river;

• The alteration of natural systems linked to

this hydrological system; and

• The new course of the river would affect a

nature reserve located alongside the Prat

International Airport.

Saving the endangered

Kentish PloverThe Kentish Plover is a small bird which lives

and breeds near rivers like the Llobregat in

Barcelona and is found in the final stretch

of the river Llobregat. The plover’s nesting

is often disturbed by people walking on the

beach to the extent that it has been put on the

endangered species list.

With the diversion of the river mouth, a plan

was formed to capture and divert the fauna

of this fragile ecosystem of the delta of the

Llobregat. This would involve diverting the

river in a way that would show the almost

respect for the environment and would not be

considered to be finished until they managed

to relocate the Kentish plover to the adjacent

nature reserve.S



Sustainable

logisticsIt isn’t difficult to see why ZAL Port was awarded the highest status of energy efficiency and is a recognised leader in environmental best practise.

Respect for the environment and social responsibility are core

issues when it comes to its planning and management. The energy

efficiency of the logistics area is a priority objective for ZAL Port, which

has been up and running since 2014 with for example the design of

new warehouses with skylights to maximize the use of sunlight and

efficient LED lighting and magnetic induction technology.

It has a purchasing group for electricity to negotiate the best kWh

pricing for all the installations in ZAL Port.

Relief from the heat of the Mediterranean climate can be found in

the interior of the warehouses, thanks to active ventilation systems

such as fans or passive systems.

As well as this, it promotes advanced fuel savings systems for

vehicles and fleets, to cite some examples.

Currently the ZAL Port photovoltaic coverage measures 60,000 m²

of flat coverage with 3 MW of plates.

Recent measures that have been included in its environmental

policy during the past year include the replacing of the areas’ street

lights with LED lighting. This measure has made substantial energy

savings in addition to considerably reducing CO₂ emissions.

In the Service Center building the light installations have been

replaced with LED lighting and a state-of-the art air conditioning

system has been installed; solar film has been placed on the

building’s windows that filters light and heat intensity as well as other

corrective measures that have made great energy savings. This has

resulted in obtaining the level A (maximum level of recognition) in

the Certificate of Energy Efficiency of the building.



Construction is underway on two new warehouses

under the parameters of the LEED certification

(Leadership in Energy & Environmental Design) that

will allow the ZAL Port to have more sustainable and

energy efficient buildings.

CILSA continues to work with the objective of

strengthening its environmental commitment, for

this reason in the first quarter of 2016 it obtained

the EMAS register (Eco-Management and Audit

Scheme), in addition this year it intends and expects

to meet the requirements of the United Nations

Agreement in CSR (Corporate Social Responsibility)

The history of ZAL Port1992:The hosting of the Olympic

Games, resulted in a huge economic

boost for the city of Barcelona and the

entire region of Catalonia. As a result,

Barcelona was rated one of the top

cities in Europe in 2000, based on a

number of factors including the quality

of life offered and the ability to attract

foreign investment.

Barcelona began to position itself

as a logistics platform in southern

Europe given the steady increase of

international traffic as a result of the

globalisation of the economy and

the concentration of production and

distribution centers.

As part of its strategic framework, the Port of

Barcelona decided to create the ZAL Port (Zona de

Actividades Logísticas - Logistical Activities Zone)

in 1992, to help position the port as a leader in

Southern Europe and the Mediterranean. They set

up an entity called CILSA (Centro de Intermodal

Logistica S.A. - Intermodal Logistics Centre Ltd.)

which would be in charge of the development

and management of ZAL Port.

Spain’s integration into the EU meant the lifting

of customs barriers which contributed to the free

movement of goods in the European Community

and the creation of a single market.

Companies started to outsource logistics services

to increase customer satisfaction. Having a good

logistical network was becoming one of the key

factors to ensure success.

The advantage that ZAL Port had over

competitors wasthat they had good intermodal

centers in which different modes of transport

were combined: land, sea, rail and air transport,

in the best location of Barcelona.

2002: A decade later the first phase of 69 hectares,

the ZAL Port (BCN), was established, and

culminated with the construction of the Service

Centre building, where a large part of the services

intended for people and companies established in

the ZAL Port are now concentrated. The service

was extended to neighbouring industrial estates

as it was strategically placed in a free access

area, so as to be able to meet the day to day

needs of the people who work in this platform

and its surrounding areas.

This date coincided with the incorporation of a

new shareholder, Abertis, which helped with the

expansion of the development, with a project of

another 143 hectares, in the municipality of El

Prat del Llobregat: ZAL Port (Prat).



Happy people

add more value6,000 direct employees work in the ZAL Port.

Mr Martínez emphasised that offering services to

these people is the core of their strategy because

happy employees lead to happy clients and this

results in an increase in the contracts signed.

ZAL Port provides a nursery school for children from

0 to 3 years of age and develops an educational

model based on balancing work and family life.

Other staff benefits include facilities such as a

fitness room, a multi-purpose indoor cycle room, a

physiotherapist’s clinic and fully equipped changing

rooms and the provision of subsidised transport.



Future Plans Exciting changes are planned as a result of a change

in shareowners (CILSA is 63% owned by the Barcelona

Port Authority, 32% by MERLIN Properties and 5% by

SEPES, Entidad Pública Empresarial de Suelo (Public

Enterprise for Land under the Ministry of Development)).

MERLIN Properties has replaced Abertis (MERLIN

Properties is the first SOCIMI (Sociedad Cotizada

Anónima de Inversión en el Mercado Inmobiliario - Real

Estate Investment Trust) of the country and a company

listed on the Ibex 35, which implies clear confidence in

the private capital company for the long term. In less

than two years MERLIN Properties will become the top

player in logistic real-estate in Spain, which will without

a doubt contribute to ZAL Port’s new expansion process

and growth in its organization) and also CILSA will be

refinancing €76 million of the company's liabilities, which

substantially reduces the service's debt for the next 5

years. This will allow it to devote the resources generated

by the company into growth.

Already two contracts have been signed with the Consorci

de la Zona Franca of Barcelona for the 75 (50+25) year

lease of almost all the available land in the BZ (the former

land where the SEAT car factory was located in the Zona

Franca area of Barcelona, which is in turn located on the

prime logistic area of the city of Barcelona). This allows

ZAL Port to lease and manage 27 new hectares of net

land which is known as: ZAL Port - Ciutat (City), and that

together with the capacity that we had already at ZAL

Port (Prat), will allow us to construct more than 350,000

m² of new logistic premises.

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ZAL PORT r4