pt urban issues no. 018

No. 018 / 23th June 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

Newsletter Editor: Adam Zdrodowski

[email protected]

tel. +48 504 182 308

OFFICE UBM has got the go-ahead for its Times II office project in Wrocław page 2 The city of Radom is currently emerging as an attractive BPO destination page 2

RETAIL CBRE Glogal Investors has bought the Galeria Mazovia shopping centre in Płock page 3

RESIDENTIAL Grupa Waryński, Dantex get building permit for the Miasto Wola project in Warsaw page 3

LOGISTICS Panattoni Europe is expanding its Park Łódź East complex in central Poland page 4

COMPANY NEWS Knight Frank has established a new Retail Asset Management department page 4

INTERVIEW Poland Today talks to Robert Martin, Principal, Head of Central Europe, at Europa Capital page 5

LATEST LEASE DEALS IN BRIEF Recent lease transactions in the office, retail and warehouse sectors page 6

COMING & GOING Tomasz Buras, Savills page 6

FACTS &FIGURES Largest completions, largest lease deals and rents in the commercial property market in 2013 page 7

The first two buildings within the park have already been completed Photo: AIG/Lincoln Polska

AIG/Lincoln AIG/Lincoln AIG/Lincoln AIG/Lincoln Polska Polska Polska Polska building new phase building new phase building new phase building new phase ofofofof its its its its The Park WarsaThe Park WarsaThe Park WarsaThe Park Warsawwww office compleoffice compleoffice compleoffice complexxxx Developer AIG/Lincoln Polska has launched construction on two new buildings within its The Park Warsaw office complex in the Polish capital page 2

RegisteR now foR

Poland & CEE Real Estate Summit Network Global Capital | Warsaw–London–Frankfurt

25 – 26 June 2014, Bristol Hotel, warsaw

DISCUSSION TOPICS INCLUDE:• How does central & eastern Europe fit into the global

property picture? • Poland: Already overbought and overpriced?• Go East!.. But are the global investors ready?• WARSAW OFFICE: How much can the Polish capital

absorb?• POLAND RETAIL: Is the nation already over-sup-

plied?• POLAND LOGISTICS: Is Europe‘s centre a logical

warehouse hub?• Speed dating: Meet new partners for capital, co-invest-

ment and deals• Central Europe: Where is the value in CE around Poland?• Investors in CE: Who are they and what do they want?

• CE OFFICE: Where’s hot and where’s not?• CE RETAIL: Variable speed consumption• CE LOGISTICS: Does it all depend on roads and rail?• OUTSOURCING: Still big but moving up the value

curve• POLAND RESIDENTIAL: Safe as houses ..

or maybe not?• HOTELS: The rise and rise of CEE hospitality• Financing CEE: Are the banks playing ball?

RegisteR today!

... to get the eaRly biRd Rate!

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Poland & CEE Real Estate Summit partners will have an unrivalled opportunity to promote to key industry players in this fast-growing region. Raise your company profile in this increasingly important region for property investment and associate your brand with

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weekly newsletter # 018 / 23th June 2014 / page 2

OFFICE

AIG/Lincoln Polska AIG/Lincoln Polska AIG/Lincoln Polska AIG/Lincoln Polska expanding The Park expanding The Park expanding The Park expanding The Park Warsaw complexWarsaw complexWarsaw complexWarsaw complex

The whole project will deliver 110,000 sqm of GLA Image: AIG/Lincoln Polska

Developer AIG/Lincoln Polska has launched con-struction on two new buildings within its The Park Warsaw office complex in the Polish capital. The buildings, which will comprise 11,900 sqm and 11,400 sqm of office space, are scheduled to be completed in July next year. The first two buildings in the complex, which comprise 10,800 sqm and 9,980 sqm of office areas, have already been com-pleted and are currently leased out in 80%. Their tenants include Cenega, IBM, Johnson Controls, NCR Polska and Qloc. The Park Warsaw development is located on ul. Krakowiaków in the Włochy district of the Polish

capital, four kilometres from the Warsaw Chopin Airport and six kilometres from the downtown of Warsaw. The investment is expected to comprise ten buildings with a combined 110,000 sqm of leas-able space. The project will feature an underground parking lot with spaces for more than 2,500 cars. Bartosz Prytuła, office development partner at AIG/Lincoln Polska, said that the company is cur-rently negotiating the first lease agreements at Lin-coln Park, another office complex which the devel-oper will develop in Warsaw. The complex will be located near ul. Marynarska and ul. Sasanki in the Włochy district and will deliver five buildings with a total of approximately 55,000 sqm of leasable space, Prytuła said.

OFFICE

UBM gets the goUBM gets the goUBM gets the goUBM gets the go----ahead ahead ahead ahead for Times II project in for Times II project in for Times II project in for Times II project in WrocławWrocławWrocławWrocław

The Voivod of Lower Silesia has recently upheld the building permit for the Times II office project which developer UBM Polska is planning to build in the Old Town area of downtown Wrocław. The planned scheme will be located on land that the company acquired from the municipal authorities in 2012 and will comprise two buildings offering a total of approximately 16,700 sqm of office space and 2,500 sqm of retail areas. UBM Polska has been present in the Polish market since 1993 and is mainly active in Warsaw, Kraków and Wrocław. The company is currently preparing to launch construction on another phase of its

Poleczki Business Park project in the Polish capital. The developer has just delivered the Alma Tower scheme in Kraków that comprises 10,700 sqm of of-fice space and was fully leased out before comple-tion to companies including Alma Market, Onet.pl and PZU.

The complex will consist of two buildings Image: UBM Polska

OFFICE

Radom emerges as an Radom emerges as an Radom emerges as an Radom emerges as an attractive BPO attractive BPO attractive BPO attractive BPO destinationdestinationdestinationdestination

The city of Radom in Mazowieckie Voivodship is currently emerging as an attractive destination for the BPO sector, said participants in the “Radom calling” conference which Poland Today organized earlier this month. Radom is located around 100


kilometres south of Warsaw and features a popula-tion of approximately 220,000. It could become a “satellite” of the Polish capital, the participants in the conference said.

AIG/Lincoln Polska president Mirosław Szydelski

Image: Poland Today

The largest cities have to date been dominant on the outsourcing map of Poland. However, investors are now also starting to look at the smaller urban cen-tres where it is easier to find good employees and optimize costs. Crucially, Radom already has many of the needed infrastructural investments in place. “It is time the city appeared on investors’ radars,” said Maciej Piwowarczyk, Senior Director, Head of EMEA Shared Service Centre, at CBRE.

In fact, a number of major investors, including Asseco Poland, Idea Call Center, Millward Brown, Multimedia Interactive and Telbridge Iron Moun-tain are already present in the city. Others are ex-pected to follow suit in the upcoming years. Com-panies already present in Poland and “mentally ready” to venture out of the largest cities in the country are the natural target for cities such as Ra-dom, said Iwona Hojnowska-Haponik, director at

the Polish Information and Foreign Investment Agency (PAIiIZ). Radom has already modern office space targeted at tenants from the BPO and SSC sectors. Developer AIG/Lincoln Polska is now preparing to launch an-other phase of its Radom Office Park investment. “AIG/Lincoln has been present in Radom for eight years now and the decision to develop a high-standard office project in the city was well thought out,” said Mirosław Szydelski, board president at AIG/Lincoln Polska.

RETAIL

Galeria Mazovia Galeria Mazovia Galeria Mazovia Galeria Mazovia shopping centre in shopping centre in shopping centre in shopping centre in Płock changes handsPłock changes handsPłock changes handsPłock changes hands

CBRE Global Investors-managed CBRE European Shopping Centre Fund (ESCF) has acquired the Galeria Mazovia shopping centre in Płock in Ma-zowieckie Voivodship from a private investor. The transaction, whose value has not been disclosed, marks the first acquisition of the fund in Central and Eastern Europe. CBRE ESCF has a number of retail facilities in Belgium, France, Germany and Sweden, whose total value amounts to more than €500 million. Opened for business in 2010, the Galeria Mazovia mall comprises nearly 28,500 sqm of leasable space and is the largest shopping and entertainment cen-tre in Płock. The facility is currently almost fully leased out. Cushman & Wakefield and the Crido Legal law firm represented the selling party in the

transaction, while the buyer was represented by Savills, Linklaters, EC Harris Arcadis and Environ. The acquisition of the Galeria Mazovia mall will help diversify the portfolio of CBRE Global Inves-tors and strengthen its presence in Poland, one of the strongest markets when it comes to GDP growth prospects, said Florencio Beccar, Fund Manager ESCF at the company. Piotr Kaszyński, Partner, Head of Capital Markets, at Cushman & Wakefield in Poland, stressed that the transaction shows the growing investor activity in the retail sector in the medium-sized cities in the country.

Galeria Mazovia was opened in 2010

Image: CBRE Global Investors

RESIDENTIAL

Grupa Waryński, Grupa Waryński, Grupa Waryński, Grupa Waryński, Dantex get building Dantex get building Dantex get building Dantex get building permit for joint projectpermit for joint projectpermit for joint projectpermit for joint project

Developers Grupa Waryński and Dantex have re-cently got a building permit for the first phase of the


Miasto Wola multi-family residential project which they are planning to jointly build in Warsaw. Con-struction on the first phase of the scheme, which will be located on ul. Jana Kazimierza in the Wola district of the Polish capital and will comprise 112 apartments, is scheduled to launch in July. The de-velopers are currently selecting a general contractor for the investment.

The whole project will comprise 811 housing units Image: Grupa Waryński

The whole Miasto Wola development is expected to deliver 811 housing units. Grupa Waryński is now also involved in another residential project in the same neighbourhood which is called Stacja Kazim-ierz and will be developed in cooperation with Pol-nord. The Miasto Wola and Stacja Kazimierz schemes are respectively valued at 354 million zloty and 291.3 million zloty. They will take approxi-mately five-six years to develop, said Jarosław Jankowski, president of the management board at Grupa Waryński. Grupa Waryński is one of five firms comprising MARS Real Estate. MARS Fundusz Inwestycyjny Zamknięty, managed by MS Towarzystwo Funduszy Inwestycyjnych, is the main shareholder in the developer. Dantex has to date developed a number of residential investments in the Wola dis-trict of Warsaw. In the years 2010-2013, the compa-

ny sold more than 1,000 apartments in the ul. Jana Kazimierza area.

LOGISTICS

Panattoni Panattoni Panattoni Panattoni building building building building another 24,000 sqm at another 24,000 sqm at another 24,000 sqm at another 24,000 sqm at Park Łódź EastPark Łódź EastPark Łódź EastPark Łódź East

Industrial space developer Panattoni Europe is cur-rently expanding its Park Łódź East logistics park in central Poland, with another 24,000 sqm of space within the complex under construction. The Park Łódź East park is located ten kilometers from downtown Łódź and comprises four buildings of-fering a total of 163,000 sqm of warehouse space. When fully developed, the park is expected to fea-ture a combined 187,000 sqm.

The park currently comprises four buildings Image: Panattoni Europe

Park Łódź East is one of four industrial parks that Panattoni Europe has in central Poland, with the other three being Panattoni Business Center Łódź, Panattoni Park Łódź South and Panattoni Park Stryków. At present, Panattoni Europe is develop-

ing a total of 265,000 sqm of warehouse space in Poland. The ongoing projects of the company in-clude two built-to-suit schemes for Amazon, in Poznań and near Wrocław.

COMPANY NEWS

Knight Frank with new Knight Frank with new Knight Frank with new Knight Frank with new Retail Asset Retail Asset Retail Asset Retail Asset Management unitManagement unitManagement unitManagement unit

Knight Frank has established a new Retail Asset Management department in Poland which special-izes in the creation and implementation of strate-gies that help maximize the value of shopping cen-tres. The newly established department is headed by Agnieszka Mielcarz who has 15 years of experi-ence in the shopping centre sector, having previ-ously worked for companies including Apsys Man-agement, Avestus Real Estate and JLL.

Agnieszka Mielcarz Image: Knight Frank

In her career, Mielcarz managed projects compris-ing a total of almost 200,000 sqm of leasable retail


space. Most recently, she managed the CH Forum shopping centre in Gliwice which is owned by the German DEKA fund. There is a growing demand for advisory services related to the revitalization of re-tail facilities of the oldest generation whose owners, faced with growing competition, need financial support and a plan of the needed changes before “restarting” their projects, Mielcarz said.

INTERVIEW

Refurbished space will Refurbished space will Refurbished space will Refurbished space will become much more the become much more the become much more the become much more the norm in CEEnorm in CEEnorm in CEEnorm in CEE

Poland Today talks to Robert Martin, Principal, Head of Central Europe, at real estate fund manager Europa Capital, about investment opportunities in the CEE markets and the plans of the company in the region. Poland Today: Poland Today: Poland Today: Poland Today: How attractive, from your peHow attractive, from your peHow attractive, from your peHow attractive, from your per-r-r-r-spective as a global investor, are now CEE and spective as a global investor, are now CEE and spective as a global investor, are now CEE and spective as a global investor, are now CEE and Poland in particular, compared to the Western Poland in particular, compared to the Western Poland in particular, compared to the Western Poland in particular, compared to the Western EurEurEurEuropean maopean maopean maopean marrrrkets?kets?kets?kets? Robert Martin: Robert Martin: Robert Martin: Robert Martin: Europa Capital is currently invest-ing Europa Fund IV which can invest anywhere in the European Union. In this context, the greater growth prospects of CE are attractive relative to many other European countries, as GDP forecasts are significantly better. However, the markets are small compared to the Western European markets, which makes sourcing suitable product more diffi-cult. There is a yield premium to be had between core Western Europe and CE which is attractive particularly in an environment which now appears

awash with new capital. Whilst occupational mar-kets are weak, they seem to be stabilising and bot-toming out, which should offer long terms stable growth prospects.

Poland Today talks to: Robert Martin, Principal, Head of Central Europe, at Europa Capital Which sectors and which locations Which sectors and which locations Which sectors and which locations Which sectors and which locations in CEE in CEE in CEE in CEE offer offer offer offer the best investment opportunities at the mthe best investment opportunities at the mthe best investment opportunities at the mthe best investment opportunities at the mo-o-o-o-ment?ment?ment?ment? We are an opportunistic investor, so being too spe-cific about what we buy often comes back to bite you. Once I said we didn’t buy hotels, but I then found a great hotel opportunity in Warsaw and bought it and it was a great investment for us! However, we will continue to look for well located product that we can turn around and sell to the in-stitutional market. In this context, we look at mar-kets and sectors which are liquid or will be liquid within the fund's investment horizon. This means the capital cities and the large Polish regional cit-ies. We will look at all sectors including hotels, residential and factory outlets, but focus on the

main food groups of office, retail and logistics. I think the 100-150 bp yield premium you see in Bu-dapest offices compared to Warsaw and Prague will have a significant impact on the markets in the next 12 months. Is there anything about the CEE markets that Is there anything about the CEE markets that Is there anything about the CEE markets that Is there anything about the CEE markets that worries you as an investor?worries you as an investor?worries you as an investor?worries you as an investor? The biggest concern is the weakness of the occupa-tional market across all sectors compared to the very fast revival of the investment market. This, however, is a European concern, rather than just a CE concern, but I am amazed at some of the things I hear are happening and prices being paid. Are you planning any acquisitions in the region Are you planning any acquisitions in the region Are you planning any acquisitions in the region Are you planning any acquisitions in the region in the near future?in the near future?in the near future?in the near future? Of course! Europa Capital will be refurbishing the SpeEuropa Capital will be refurbishing the SpeEuropa Capital will be refurbishing the SpeEuropa Capital will be refurbishing the Spek-k-k-k-trum Tower buildingtrum Tower buildingtrum Tower buildingtrum Tower building in Wain Wain Wain Warrrrsaw. In general, do saw. In general, do saw. In general, do saw. In general, do you now see opportunities in the redeveloyou now see opportunities in the redeveloyou now see opportunities in the redeveloyou now see opportunities in the redeveloppppment ment ment ment and repositioning of existing office and retail aand repositioning of existing office and retail aand repositioning of existing office and retail aand repositioning of existing office and retail as-s-s-s-sets in Poland?sets in Poland?sets in Poland?sets in Poland? There are many interesting opportunities in this area and one in which Europa has been very suc-cessful in the past 20 years we have been active in CE. We continue to look at it. The start of the re-furbishment of Spektrum Tower took longer than we hoped, but is now well underway and we have some really exciting ideas for this landmark build-ing, which offers so much flexibility. It seems to have a bad market perception, possibly because of the history of its construction, but it is, in fact, a very highly specified building. For example it has a 2.9 metre floor to ceiling height and 314 under-ground car parking spaces (the best ratio in the CBD at 1.89). We have already agreed a number of


new leases with tenants attracted by the location, high quality refurbishment and financial terms we can offer. Last year we acquired a 30,000-sqm existing ware-house with 14.5 hectares of development land in Prague (Westgate Park, Rudna) and the refurbish-ment of the building is now underway. The chal-lenge with the refurbishment/repositioning con-cept is that many of the big office and logistics oc-cupiers in CE seem to think they want new build-ings just because they are new, despite the often better location, specification and rent of refur-bished space. This is very different in Western Europe where refurbished buildings are a signifi-cant part of the market. In CE this is still emerging, but we believe development pressures and tenants demands will change as the markets continue to mature and refurbished space will become much more the norm. After the sale of Poznań City Center, are you After the sale of Poznań City Center, are you After the sale of Poznań City Center, are you After the sale of Poznań City Center, are you considering other investments involving proconsidering other investments involving proconsidering other investments involving proconsidering other investments involving prop-p-p-p-erty ownerty ownerty ownerty owned by Polish State Raied by Polish State Raied by Polish State Raied by Polish State Raillllways?ways?ways?ways? PKP was a very good partner on that project and they own a number of very strategic sites which present great opportunities. So yes, of course we would consider other investments, but as always, the context and numbers need to add up.

ROBERT MARTIN Robert Martin started his career in 1991 at Herring Baker Harris in London, and in 1998 completed an MBA in Cape Town University. One of five founding partners of Europa Capital in 1999, he focused primarily on Ger-many, Austria and CEE, where he has now been active for 15 years. Martin has been involved in establishment and strategy of Europa Funds I, II, III & IV and the Emerging Europe Fund.

Europa Capital is one of the partners of the Poland & CEE Real Es-

tate Summit which Poland Today and Property Investor Europe

are organizing at the Bristol Hotel in Warsaw on June 25-26.

LATEST LEASE DEALS IN BRIEF

Prologis Park Warsaw II Image: JLL

Packaging distributor Rajapack Rajapack Rajapack Rajapack has taken up al-most 6,000 sqm of warehouse and office space at Gate One Business Park in Warsaw. Cushman & Wakefield represented the tenant in the negotia-tions process. Located in the south of the Polish capital, near the international Warsaw Chopin Air-port, the Gate One Business Park facility comprises a combined 18,780 sqm of leasable warehouse and office space and is currently leased out in 76%. Advised by JLL, Westwing Home & Living Westwing Home & Living Westwing Home & Living Westwing Home & Living has leased 3,200 sqm of warehouse and office space at Prologis Park Warsaw II. The company will move into its new premises in the third quarter of this year. The Prologis Park Warsaw II distribution cen-tre is located in the Targówek district of the Polish

capital and comprises four buildings offering a combined 39,000 sqm of warehouse space.

COMING & GOING

Tomasz BurasTomasz BurasTomasz BurasTomasz Buras

Tomasz Buras has been appointed as the new man-aging director of Savills in Poland. The promotion follows the recent appointment of Brian Burgess as the head of Central Europe at the company. Buras has more than twelve years of experience and has been working for Savills since September 2011 when he joined as the head of the office agency at the Warsaw office of the company.

weekly newsletter # 018/ 23th June 2014 / page 7

FACTS & FIGURES

LaLaLaLargest industrialrgest industrialrgest industrialrgest industrial projects delivered in 2013projects delivered in 2013projects delivered in 2013projects delivered in 2013

Location Project Developer Area

(sqm)

Wrocław Panattoni BTS Lear Panattoni 32,300

Silesia SEGRO Business Park Gli-

wice Building B SEGRO 31,700

Warsaw Tulipan Park Warszawa

Bulding B SEGRO 24,000

Silesia SEGRO Industrial Park

Tychy B SEGRO 18,300

Wrocław Prologs Park Wrocław V Prologis 18,282

Source: Colliers International

Largest office projects delivered in 2013Largest office projects delivered in 2013Largest office projects delivered in 2013Largest office projects delivered in 2013


(sqm)

Warsaw Konstruktorska

Business Center HB Reavis 48,300

Warsaw Miasteczko Orange Bouygues Immobilier 43,700

Warsaw Plac Unii BBI Development

/Liebrecht & wooD 41,300

Warsaw Marynarska 12 Ghelamco 40,000

Wrocław Sky Tower LC Corp 28,100


LaLaLaLargest retailrgest retailrgest retailrgest retail projects delivered in 2013projects delivered in 2013projects delivered in 2013projects delivered in 2013


(sqm)

Gliwice Europa Centralna Helical Poland 67,000

Kraków Galeria Bronowice Immochan 60,000

Poznań Poznań City Center TriGranit 58,000

Gdynia

Centrum Riviera

(Wzgórze

– extension)

Mayland Real Estate 70,500

Katowice Galeria Katowice

Meyer Bergman

European Retail

Partners/ Neinver

42,000


Selected Selected Selected Selected large investment transactions large investment transactions large investment transactions large investment transactions in 2013in 2013in 2013in 2013

Sector

Project

Value

(EUR mil-

lion)

Seller

Buyer

Retail Silesia City

Center

412 Immofinanz Allianz, ECE

Retail Galeria

Kazimierz 180

Globe Trade

Center,

Aventus

Invesco RE

Retail Galeria Domini-

kańska 151.7 ECE

Atrium

European Real

Estate

Office New City

127 ECI

Hines Global

REIT

Office Mokotów Nova

121 Ghelamco

Tristan Capital

Partners

Office Senator

120 Ghelamco

Union

Investment

In-

dustrial

H&M ware-

house

64 Invesco RE W.P. Carey

Indus-

trial Żerań Park II 43.2

Area Property

Parners,

Apollo Rida

Poland

SEGRO


LLLLargest office lease dealsargest office lease dealsargest office lease dealsargest office lease deals in 2013in 2013in 2013in 2013

Location Tenant Area(sqm) Project

Warsaw Polkomtel 22,680 Konstruktorska 4

Warsaw Getin Holding 18,850 Wola Center

Warsaw Urząd Rejestracji Leków 13,000 Adgar Park West

Warsaw Bank Zachodni

WBK 11,800 Atrium 1

Wrocław Getin Holding 11,700 Sky Tower


Retail rents (EUR/sqm/month), Q3 2013Retail rents (EUR/sqm/month), Q3 2013Retail rents (EUR/sqm/month), Q3 2013Retail rents (EUR/sqm/month), Q3 2013

20

30

40

50

60

70

80

90

ŁódźWrocław

Tri-citySzczecin

PoznańKraków

Warsaw (out of town)Silesia

Warsaw (city centre)

Source: Cushman & Wakefield

Office rents (EUR/sqm/month), Q3 2013Office rents (EUR/sqm/month), Q3 2013Office rents (EUR/sqm/month), Q3 2013Office rents (EUR/sqm/month), Q3 2013

Source: Cushman & Wakefield

10 15 20

25

Gdańsk

Szczecin

Katowice

Poznań

Kraków

Wrocław

Warsaw (non-central)

Warsaw (CBD)

Largest industrial lease deals in 2013Largest industrial lease deals in 2013Largest industrial lease deals in 2013Largest industrial lease deals in 2013

Location Tenant Area(sqm) Project

Wrocław Amazon 123,500 Goodman Wrocław South

Logistic Center

Poznań Amazon 100,653 Panattoni Poznań

Wrocław Amazon 100,653 Panattoni Wrocław

Poznań supermarket

chain 82,385 -

Central Po-

land Castorama 49,961 Panattoni Park Stryków


pt urban issues no. 018

Documents

central poland page

warsaw page

poland retail

pock page

savills page

wrocaw page

polish capital page

ce office