No. 021 / 14th July 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

Newsletter Editor: Adam Zdrodowski

adam.zdrodowski@poland-today.pl

tel. +48 504 182 308

OFFICE Developer Skanska Property Poland is finishing work on its Kapelanka 42 office project in Kraków page 2 Grupa Waryński has secured a building permit for its planned EQlibrium office project in Warsaw page 3

RESIDENTIAL Developer Yareal Polska will soon launch construction on its Rezydencja Konstacińska project in Warsaw page 3

RETAIL There is still room for new retail schemes in Warsaw, said a recent report by JLL, Reas and GfK Polonia page 4

INTERVIEW Poland Today talks to Michał Leszczyński, an architect at the Grupa 5 Architekci architectural studio page 5

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

COMING & GOING Karolina Bartuś, SEGRO page 6

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

The second phase of the complex will be ready in Q1 2016 Photo: HB Reavis

HB Reavis launching seconHB Reavis launching seconHB Reavis launching seconHB Reavis launching second phase of d phase of d phase of d phase of Gdański Business Center in WarsawGdański Business Center in WarsawGdański Business Center in WarsawGdański Business Center in Warsaw Developer HB Reavis has launched construction on the second phase of its Gdański Business Center office complex in down-town Warsaw page 2

weekly newsletter # 021 / 14th July 2014 / page 2

OFFICE

HB Reavis launches HB Reavis launches HB Reavis launches HB Reavis launches second phase of GBC second phase of GBC second phase of GBC second phase of GBC project in Warsawproject in Warsawproject in Warsawproject in Warsaw

Developer HB Reavis has launched construction on the second phase of its Gdański Business Center of-fice project in downtown Warsaw. This phase of the scheme is expected to deliver a total of more than 50,000 sqm of class-A space in two buildings in the first quarter of 2016. The second phase of the Gdański Business Center development has been de-signed by the Hermanowicz Rewski Architekci ar-chitectural studio. HB Reavis plans to secure a BREEAM Excellent certificate of energy efficiency and environmental performance for the investment.

The whole project will comprise 98,000 sqm Image: HB Reavis

The Gdański Business Center project is located at the intersection of ul. Andersa and ul. Inflancka in the northern part of the Śródmiescie district of Warsaw, close to the Gdański railway station and the Arkadia shopping mall. The scheme will com-prise a combined 98,000 sqm of leasable space

when fully developed. HB Reavis has recently de-livered the first phase of the development which is leased to tenants including KPMG, SNC Lavalin and Provident. According to Mateusz Polkowski, an associate di-rector at the research and consultancy department of JLL, the Gdański railway station area has devel-opment potential as an office destination. The area is already becoming an alternative to some of the more established office locations in Warsaw, in-cluding parts of the Wola district and the southern fringes of the downtown, he said. Polkowski pointed out that the area of the Gdański railway station offers access to subway, railway, bus and tram transportation, while the nearby Arkadia mall offers all the amenities that office workers need. He noted that Ghelamco is going to redevelop the Gdański railway station and build new office space around it, while Balmoral Properties is plan-ning to develop two office buildings near the Arkadia mall. Founded in 1993 in Bratislava, HB Reavis is active in the Central and Eastern European markets of Po-land, the Czech Republic, Slovakia and Hungary, as well as in the UK and in Turkey. The company has to date developed 750,000 sqm of office, retail and logistics space, with another 875,000 sqm under construction and in the pipeline. In Poland, HB Reavis is now also developing the Postępu 14 office project in Warsaw. The company is currently planning a major office complex in downtown Warsaw which will be built on a site located opposite the Złote Tarasy shopping centre and is expected to deliver approximately 100,000 sqm of leasable space. The developer is also preparing to launch its West Station scheme located in the Ochota district of the Polish capital that will

involve the redevelopment of the Warsaw West railway station and the development of new office space in its vicinity.

OFFICE

Skanska Property Skanska Property Skanska Property Skanska Property Poland delivering new Poland delivering new Poland delivering new Poland delivering new Kraków officesKraków officesKraków officesKraków offices

The whole scheme will be ready in a few weeks Image: Skanska Property Poland

Developer Skanska Property Poland has recently finished construction on building B of its Kapelanka

weekly newsletter # 021 / 14th July 2014 / page 3

42 class-A office project in Kraków, the first office scheme of the company in the city. The building comprises over 11,200 sqm of space. “The whole Kapelanka 42 complex is scheduled to be com-pleted in the third quarter of 2014,” said Mariusz Krzak, regional director at Skanska Property Po-land. Located at the intersection of ul. Kapelanka and ul. Kobierzyńska in the Podgórze district of Kraków, the Kapelanka 42 development comprises two nine-floor buildings offering a total of approximately 30,000 sqm of leasable office space. The investment has been designed by the Medusa Group architec-tural studio and has already been LEED Gold-pre-certified. The complex is being built by construc-tion company Skanska and commercialized by Skanska Property Poland. Active in the Polish commercial property market since 1997, Skanska Property Poland has projects in six cities across the country – in Warsaw, Wrocław, Poznań, Łódź, Kraków and Katowice. At the mo-ment, the developer is building and planning in Po-land office schemes including Atrium 2 and Genera-tion Park in Warsaw, Dominikański in Wrocław and Silesia Business Park in Katowice.

OFFICE

GrGrGrGreen light for een light for een light for een light for EQlibrium project in EQlibrium project in EQlibrium project in EQlibrium project in WarsawWarsawWarsawWarsaw

Developer Grupa Waryński has recently secured a building permit for its planned EQlibrium office project in Warsaw. Construction on the scheme is

scheduled to launch in the upcoming weeks. The development has been designed by the S.A.M.I. Ar-chitekci Mariusz Lewandowski i Wspólnicy archi-tectural studio and is being commercialized by JLL. It will deliver almost 9,900 sqm of leasable office and service space. The investment will be located at the intersection of ul. Jana Kazimierza and ul. Ordona in the Wola dis-trict of the Polish capital. Grupa Waryński is al-ready involved in two residential projects in the area which it is developing in cooperation with de-velopers Polnord and Dantex. The area of ul. Jana Kazimierza has to date been mostly associated with residential schemes but the proximity to major roads also make it attractive for office tenants look-ing for locations outside downtown Warsaw, said Tomasz Czuba, director, office leasing department, at JLL.

Construction on the project is set to start soon

Image: Grupa Waryński

RESIDENTIAL

Yareal starts building Yareal starts building Yareal starts building Yareal starts building new residential project new residential project new residential project new residential project in Warsawin Warsawin Warsawin Warsaw

Developer Yareal Polska will later this month launch construction on its planned Rezydencja Konstancińska residential project in Warsaw. Kal-ter is the general contractor of the scheme which is scheduled to be completed at the beginning of 2016. The Rezydencja Konstancińska development is lo-cated in the Sadyba neighbourhood of the Mokotów district of the Polish capital, near the Sadyba Best Mall shopping and entertainment centre. The investment, which has been designed by the Ad3 Architektura Design Studio Projektowe Artur Klocek architectural studio, will deliver 92 apart-ments, sized from 32 sqm to 163 sqm and priced at from 8,500 zloty to 11,300 zloty per sqm. There is considerable buyer interest in the project, with Yareal Polska having signed reservation agreements for 40% of the housing units in the scheme before the start of construction, said Olga Prokopiak, mar-keting director at the company. Yareal Polska has already completed a number of upper-standard and luxury residential develop-ments in Poland which include the Rezydencja Bi-ała and Hoża 55 investments in downtown Warsaw. The company continues to look for land for its fu-ture housing projects in the country. Planned schemes include a new development in the Gocław neighbourhood of the Praga Południe district of Warsaw which will deliver 400 apartments, Pro-kopiak said.

weekly newsletter # 021 / 14th July 2014 / page 4

Yareal has recently started work on its Londyńska 5 residential investment located in the Saska Kępa neighbourhood of the Praga Południe district which will deliver 27 housing units towards the end of next year. The company is currently also developing its Brylowska 2 multi-family residential project lo-cated in the Wola district of Warsaw which will de-liver 74 housing units at the beginning of next year.

The investment will be completed in early 2016

Image: Yareal Polska

RETAIL

Warsaw with potential Warsaw with potential Warsaw with potential Warsaw with potential for the development of for the development of for the development of for the development of new new new new retail projectsretail projectsretail projectsretail projects

The districts of Białołęka, Ursynów, Wawer, Wilanów and Wola are some of the most promising locations in Warsaw in terms of the potential for the development of new retail projects, according to a recent report by JLL, Reas and GfK Polonia. The authors based the study on the analysis of the num-ber of new residential schemes which are expected

to be developed in the various districts of the Polish capital, as well as on the amount of the existing re-tail space and the purchasing power in the various parts of the city. There is now approximately 1.6 million sqm of re-tail space in Warsaw, which accounts for around 13% of the total retail stock in Poland, said Agni-eszka Tarajko-Bąk, a senior research analyst at JLL. A large shopping centre was last delivered in War-saw in 2007 (Złote Tarasy) but several smaller fa-cilities, including Plac Unii City Shopping, have been completed since then. GTC plans to develop two large malls in Warsaw (in Białołęka and in Wilanów) by 2016. Meanwhile, it is expected that the emergence of new residential areas will be driving demand for new retail space in the Polish capital. “The residen-tial market has a huge influence on the distribution of retail facilities,” said Katarzyna Kuniewicz, di-rector, market research, at Reas. She added that an average 13,000 homes are sold in Warsaw each year. According to Reas data, in the years 2014-2017 and 2018-2025 developers will respectively deliver 60,000 and 110,000 new housing units in the city. Also the high purchasing power of the inhabitants of Warsaw continues to make the city an attractive market for retail space developers. The budget of the average Varsovian is almost 80% higher than the budget of the average Pole. Between 2005 and 2013, the average purchasing power of the inhabi-tants of Warsaw more than doubled, to over 44,000 zloty per capita per year, said Agnieszka Kowalewska, project manager at GfK Polonia. According to the report, Białołęka will continue to be one of the most quickly developing districts in Warsaw in the upcoming years and will thus need a new large retail facility with a grocery component.

In a similar vein, the quickly growing Miasteczko Wilanów residential neighbourhood in Wilanów justifies the development of a major retail project in the district. The scheme would likely also attract buyers from the nearby Powsin and Konstancin-Jeziorna communities. The peripheral district of Wawer has a very low re-tail space saturation rate and hence could accom-modate new retail facilities. However, their scale will have to be tailored to the needs of the local buyers. Ursynów could absorb additional retail space, potentially following the extension of an ex-isting facility, and so could Wola which will be one of the residential hotspots in Warsaw in the near fu-ture, the JLL, Reas and GfK report said.

Plac Unii City Shopping was delivered last year

Image: JLL

weekly newsletter # 021 / 14th July 2014 / page 5

INTERVIEW

DevelopersDevelopersDevelopersDevelopers increasingly restarting increasingly restarting increasingly restarting increasingly restarting frozen pfrozen pfrozen pfrozen projectsrojectsrojectsrojects

Poland Today talks to Michał Leszczyński, an archi-tect at the Grupa 5 Architekci architectural studio, about the rebound in the property market in Poland and the improving quality of new architecture in the country. Poland Today: Poland Today: Poland Today: Poland Today: YYYYou ou ou ou havehavehavehave recentlrecentlrecentlrecently ry ry ry reeeesumed work sumed work sumed work sumed work on on on on a majora majora majora major mixedmixedmixedmixed----use pruse pruse pruse proooojectjectjectject onononon ul. Szwedzkul. Szwedzkul. Szwedzkul. Szwedzka in a in a in a in Warsaw whiWarsaw whiWarsaw whiWarsaw which wasch wasch wasch was shelvedshelvedshelvedshelved during the during the during the during the crisis. Is crisis. Is crisis. Is crisis. Is it a oneit a oneit a oneit a one----off coff coff coff case or do you now see, as the market ase or do you now see, as the market ase or do you now see, as the market ase or do you now see, as the market picpicpicpicks up,ks up,ks up,ks up, old old old old schemesschemesschemesschemes increasinglyincreasinglyincreasinglyincreasingly cocococommmminginginging back back back back to the market?to the market?to the market?to the market? Michał Leszczyński: Michał Leszczyński: Michał Leszczyński: Michał Leszczyński: We have been resuming work on the designs prepared by us during the invest-ment boom in the years 2006-2008 for over a year now. The first of such projects, which was restarted in 2011, was the InCity residential scheme on ul. Siedmiogrodzka in the Wola district of Warsaw. The new investor – OKAM – took the investment over from its former developer. In the meanwhile, the residential market had changed. The size of the average apartment on sale in the city decreased dur-ing the crisis. This resulted from the changing by banks of their home purchase financing policies. We tailored the structure of the apartments in the project to the new market conditions. We also restarted work on a number of mid-market residential schemes. For instance, we finished de-signing the Osiedle Strumykowa development in

the Białołęka district of Warsaw. Work on the in-vestment on ul. Szwedzka was resumed this year. However, not all of the shelved projects have come back to us. Some investors have left Poland for good and their sites have not yet been sold. For example, this is the case with the Browar Piast residential and commercial project in Wrocław. The property is still on sale, we have the needed documentation and are ready to restart designing the scheme as soon as a new investor has taken over the site.

Poland Today talks to: Michał Leszczyński, an architect at the Grupa 5 Architekci architectural studio How do you view the current How do you view the current How do you view the current How do you view the current situsitusitusituaaaation in the tion in the tion in the tion in the property marketproperty marketproperty marketproperty market in Polandin Polandin Polandin Poland, from the perspective , from the perspective , from the perspective , from the perspective of an aof an aof an aof an arrrrchitectchitectchitectchitectural firm? Has tural firm? Has tural firm? Has tural firm? Has the number of newhe number of newhe number of newhe number of new cocococonnnntracts tracts tracts tracts in the marketin the marketin the marketin the market increased of late?increased of late?increased of late?increased of late?

We have been witnessing a rebound in the architec-tural services market for a few months now. We are now doing more site analyses and conceptual de-signs. This mostly pertains to residential invest-ments, but not only – we are also working on office developments. The number of new contracts this year much exceeds the number of contracts won last year and in 2012. The investments which were frozen during the crisis are being restarted. There are also new projects in the market, launched by in-vestors who have survived the crisis and strength-ened their positions. The largest residential devel-opers with whom we cooperate are now buying new plots and stepping up their development activ-ity. In general, have new real estate prIn general, have new real estate prIn general, have new real estate prIn general, have new real estate proooojects jects jects jects that are that are that are that are developed in Poland developed in Poland developed in Poland developed in Poland changed much since the changed much since the changed much since the changed much since the prepreprepre----crcrcrcrisis years? Would youisis years? Would youisis years? Would youisis years? Would you say thatsay thatsay thatsay that new new new new schemes schemes schemes schemes are now smaller but better thoughtare now smaller but better thoughtare now smaller but better thoughtare now smaller but better thought----out?out?out?out? Yes, this is definitely the case. The projects devel-oped today are generally better thought-out than those which were prepared in the boom years when many people from outside the real estate market suddenly became developers as the residential and commercial markets were able to absorb every-thing, irrespective of the quality of a given project. Are developers and investors now paAre developers and investors now paAre developers and investors now paAre developers and investors now payyyying more ing more ing more ing more attention to the quality of the dattention to the quality of the dattention to the quality of the dattention to the quality of the deeeesigns of their signs of their signs of their signs of their projectprojectprojectprojects than five or ten years than five or ten years than five or ten years than five or ten years ags ags ags ago? Can we say o? Can we say o? Can we say o? Can we say thatthatthatthat the quathe quathe quathe quallllity of newity of newity of newity of new aaaarrrrchitecture chitecture chitecture chitecture in Pin Pin Pin Pooooland land land land has has has has iiiinnnncreasedcreasedcreasedcreased in recent years?in recent years?in recent years?in recent years? Nowadays, developers and investors analyze the market and the needs of their clients much more closely. And with the supply in the residential mar-ket being increased and banks having stricter lend-ing policies, apartment buyers are currently more selective while looking at the various apartment

weekly newsletter # 021 / 14th July 2014 / page 6

sale offers. The regular gaudy press advertisement or billboard do not work any longer. It is the brand and the reputation of a given developer, as well as the satisfaction of those clients who have already bought their apartments, that count. We are also happy to see that it increasingly matters now which architectural studio has designed a particular pro-ject.

MICHAŁ LESZCZYŃSKI Michał Leszczyński was one of the founders of Grupa 5 Architekci in 1998. A graduate of the Architecture De-partment of the Warsaw University of Technology, he has been teaching at the Architecture and Construction Department of the Lublin University of Technology since 2008.

LATEST LEASE DEALS IN BRIEF Publishing house Nowa Era Nowa Era Nowa Era Nowa Era has leased approxi-mately 7,000 sqm of distribution space at the SEGRO Business Park Warsaw, Ożarów logistics park near the Polish capital. The park offers a total of 36,600 sqm of space in four buildings. Logistics operator PST OST SPED PST OST SPED PST OST SPED PST OST SPED has recently taken up a total of 3,750 sqm of warehouse and of-fice space at the Prologis Park Wrocław complex in Lower Silesia. Axi Immo advised the tenant in the negotiations process. Prologis Park Wrocław is lo-cated close to an A4 motorway junction, approxi-mately 15 kilometres from downtown Wrocław. The park comprises five buildings offering a total of more than 170,000 sqm of space. City Service Center Poland City Service Center Poland City Service Center Poland City Service Center Poland has leased an addi-tional 7,900 sqm of space at the T-Mobile Office Park complex in Warsaw which was developed by

Ghelamco Poland. DTZ represented the tenant in the negotiations process. The T-Mobile Office Park complex is located on ul. Marynarska in the Mokotów district of the Polish capital and com-prises 40,000 sqm of space. It is anchored by T-Mobile and is now almost fully leased out.

T-Mobile Office Park in Warsaw Image: Ghelamco Poland

MOL EuropeMOL EuropeMOL EuropeMOL Europe, the European subsidiary of the Japanese transport company Mitsui O.S.K. Lines, will open a shared services centre at the Torus-owned Alchemia business park in Gdańsk. The company has leased 800 sqm in the Aurum Tower building of the complex.

Six new tenants – Smyk Smyk Smyk Smyk (500 sqm), Empik Empik Empik Empik (280 sqm), Apteka Benefactor Apteka Benefactor Apteka Benefactor Apteka Benefactor (133 sqm), Cliff Sport Cliff Sport Cliff Sport Cliff Sport (105 sqm), Olika Olika Olika Olika (75 sqm) and Reporter Young Reporter Young Reporter Young Reporter Young (53 sqm) will open their stores at the marcredo Center shopping centre in Kutno in central Poland. Opened for business in May this year, the marcredo Center mall is owned by the German property fund elbfonds Development. Cushman & Wakefield is the manager and exclusive leasing agent of the facil-ity.

Footwear retailer CCC CCC CCC CCC has leased 680 sqm of space at the Dekada Malbork convenience shopping cen-tre which investor Dekada Realty is now developing in Malbork in northern Poland. The facility will de-liver 5,400 sqm of space next year.

COMING & GOING

Karolina BartuśKarolina BartuśKarolina BartuśKarolina Bartuś

Karolina Bartuś has recently been appointed as the new leasing manager for the Warsaw and Gdańsk areas at SEGRO. Bartuś has six years of experience in the warehouse property market and previously worked at companies including Jartom and DTZ.

weekly newsletter # 021/ 14th July 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

Location Project Developer Area

(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

Source: Colliers International

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

Location Project Developer Area

(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

Source: Colliers International

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

Source: Colliers International

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

Source: Colliers International

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

Source: Colliers International