Juliana BedoyaFree Trade Zones (FTZs) are no longer places for the transit of import and export products; they are increasingly expanding their offer to accommodate nearshore technology service companies such as BPOs, call centers and data centers.
For this reason, FTZs have specialized in creating tailor-made workspaces for clients, adapting to the specific dynamics of each business and the hybrid work rhythms that have become a trend in recent years.
This is the case of the Vigo Free Zone in Spain, which has started offering buildings à la carte. A concept that goes one step further by offering the possibility of leasing a space built exclusively for the needs of a particular client.
We spoke to the director of the Vigo Free Trade Zone, David Regades, about the specifics of this project and how these spaces will end up being beneficial for the nearshore and technology business.
Can you explain the concept of “à la carte” buildings in Free Trade Zones and how they differ from traditional business spaces?
Until now, the traditional activity of the Vigo Free Zone has been to design and build warehouses and office buildings without specific clients. Once completed, they were offered to potential clients. In these cases, standard spaces were supplied and if the company had specific needs or if the space was not adapted to its needs, they had to carry out the adaptation work with their own resources.
Recently, the Vigo Free Zone has launched a new line of services adapted to the specific needs of specific clients. We build according to the project the customer has requested. In this way, we open up the possibility of constructing buildings on demand, meeting real needs in terms of dimensions, spaces for equipment, uses, materials, foundations, etc. The company does not have to invest any time or effort in construction.
Moreover, in these cases, the company does not have to make long-term investments in real estate assets, thus reducing its need for Capital Expenditure (CapEx): the investment is made by the Vigo Free Zone, which would simply charge a rent. As a result, companies can focus their resources on meeting their financial needs for machinery and equipment and on the specific activity of their business.
A company should allocate its financial resources to production and not to bricks and mortar. In Spain we say “zapatero a tus zapatos” (cobbler, to your shoes).
What trends are driving the demand for customizable and flexible workspaces among global companies, particularly in the outsourcing and nearshore services sectors?
In general, we can say that global companies have been pursuing for years a trend of seeking flexibility, which leads them to try not to commit themselves in the long term to a real estate asset that depreciates in more than 50 years.
This trend is one of the reasons that have led the Vigo Free Zone to become fully involved in the offering of these buildings “à la carte” or “on demand”. The decision of a global company to locate in one area or another can depend to a large extent on the amount of initial investment to be made. In the Vigo Free Zone, we believe that offering these companies the buildings they need, without having to invest a significant amount of money, can be a decisive reason for them to choose our location instead of others.
The same happens in the case of outsourcing or nearshore. Whether a company wants to outsource a part of its activity or to completely relocate in Spain/Europe after being delocalized in the past, we offer them a space adapted to their needs where they do not have to spend a significant amount. That can be decisive for them to choose our spaces.
How do these customized spaces impact the operational efficiency and scalability of companies over 20 to 50-year leases?
Let me turn the question back to you: how do you think it is easier for a company to scale? Will it scale faster and faster if it has to tie up millions in bricks and mortar? Or will it scale faster and faster if it can allocate the resources it doesn’t have to more and better production lines, people, materials?
The answer seems obvious. A company should allocate its financial resources to production and not to bricks and mortar. In Spain we say “zapatero a tus zapatos” (cobbler to your shoes).
What challenges do developers face in creating highly adaptable spaces to meet different business needs?
Actually, the project design is carried out by the client company with its own resources or commissioning the architecture/engineering firm with which they usually work. So the client is the one who decides what it wants. The technicians of Vigo FTZ study the project and, once approved, they take it over, carry it out and manage it. Everything is done involving the client company in the construction management to ensure that everything is done according to their needs and agreed criteria. This guarantees that our resources and technical team will achieve the correct outcome in compliance with the public procurement legislation.
How have long-term lease options (20 to 50 years) contributed to the economic stability of Free Zones and their attractiveness to international investors?
Vigo Free Trade Zone is a solid and solvent administration that has been operating in Vigo for more than 75 years. We have clients such as Stellantis (originally Citröen), GKN or some ship chandlers which have had active leases for more than 70 years.
But, it is also true that, over the last 25 years, we have gradually increased the amount of space we lease. Today, we have a portfolio of more than 230 customers, ranging from a 220 square feet office to large 107,000 square feet warehouses. And the supply of space is growing, which is helping to stabilize our FTZ.
What role do advanced technology and sustainability play in the customization of these modern business spaces?
We are proud to say that the Vigo Free Zone has been committed to the environment for many years. For example, in 2011 we inaugurated 40 warehouses of more than 10,000 square feet each in one of our industrial parks, which were the first industrial buildings in Spain to be awarded the BREEAM rating (Building Research Establishment’s Environmental Assessment Method). It demonstrates our historical commitment to sustainability. Today, the technical specifications of our buildings include all the measures for sustainability and home automation that are appropriate for the type of space we are promoting.
How do you see the development of “à la carte” buildings shaping the future of free zones and their competitiveness in the global market?
Certainly, it will be a seed that will spread to all Free Trade Zones. Its important to ask the same question to the rest of them.
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