pt urban issues no. 033

No. 033 / 27th October 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

Newsletter Editor: Adam Zdrodowski

[email protected]

tel. +48 504 182 308

OFFICE Hines has obtained a BREEAM In-Use certifi-cate for its Sterlinga Business Center office building in Łódź page 2

RETAIL The supply of new shop-ping centre space in Po-land is set to increase next year, according to a recent report page 3

LOGISTICS The total investment volume in the warehouse property market in Poland could reach a record level this year page 3

RESIDENTIAL Warsaw-focused Dom Development is considering expanding to new regional markets across Poland page 4

INTERVIEW GRI talks to Maciej Tuszyński, executive director, head of Poland, at Westdeutsche ImmobilienBank page 5

LATEST LEASE DEALS IN BRIEF Recent lease transactions in the office, retail and warehouse sectors page 5

COMING & GOING Scott Dwyer, Atrium Eu-ropean Real Estate page 6

FACTS &FIGURES Largest completions, largest lease deals and rents in the commercial property market in 2013-2014 page 7

The scheme houses office, retail and hotel space Photo: Wisher Enterprise

Wisher Enterprise completes Wisher Enterprise completes Wisher Enterprise completes Wisher Enterprise completes Silver Silver Silver Silver Tower Center projecTower Center projecTower Center projecTower Center project in Wrocławt in Wrocławt in Wrocławt in Wrocław Kiev-based real estate investor Wisher Enterprise has delivered its Silver Tower Center project in downtown Wrocław. The company is now developing a new office scheme in Warsaw. page 2

A n n a M a r i a M c Ke eve r, D i re c to r fo r C E E + 4 4 2 0 7 1 2 1 5 0 5 6 | a n n a . m c ke e ve r @ g l o b a l re a l e s t ate. o rg www.globalrealestate.org/CEE2014

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The CEE Region’s most Senior Level Real Estate Investment Meeting

• Financing CEE

• Foreign Funds

• International Capital

• Logistics & Distribution Markets

• Investing in CEE

• Retail & Leisure

• SEE Investors

• Tenants & Occupiers

• Office facilities

A GLIMPSE OF THE DISCUSSION TOPICS

and many more... and many more...

CEE

GRI2014

The 10th annual

Árpád TörökCEO

TRIGRANIT

MANAGEMENT

CORPORATION

Dr Edgar RosenmayrMD/Board Member

KULCZYK SILVERSTEIN

PROPERTIES

Michal KramarzHead of Retail,

Finance & Tourism

GOOGLE POLAND

Christopher ZeunerMD - CEE Acquisitions LASALLE INVESTMENT MANAGEMENT

Florian NowotnyCFO

CA IMMOBILIEN

ANLAGEN AG

Martin Schlichting VP & Head of Int’l Clients

& Cross Border Finance

ERSTE GROUP

Katarzyna Zawodna Managing Director

SKANSKA PROPERTY

POLAND SP. Z O.O.

Olivier Gerard-Coester Board Member

MAYLAND REAL ESTATE

WARSAW 1-2 DECEMBERS O F I T E L V I C T O R I A

GRI meetings provide a forum for the world’s leading real estate players to develop valuable relationships, find new business partners, and strengthen their global networks.

weekly newsletter # 033 / 27th October 2014 / page 2

OFFICE

Silver Tower Center Silver Tower Center Silver Tower Center Silver Tower Center project in Wrocław project in Wrocław project in Wrocław project in Wrocław opened for businessopened for businessopened for businessopened for business

After two years of construction, real estate investor Wisher Enterprise has completed and officially opened for business its Silver Tower Center office and hotel project in downtown Wrocław. The scheme is located near the main railway station of the city and comprises more than 16,000 sqm of leasable space, including 7,500 sqm of office space, 4,800 sqm of hotel space and 1,800 sqm of retail ar-eas.

The project has delivered over 16,000 sqm of GLA Image: Wisher Enterprise The mixed-use development, whose value amounts to 113 million zloty, was built by construction com-pany Karmar and is being commercialized by

Cushman & Wakefield and Knight Frank. A three-star ibis Styles Wrocław Centrum hotel opened for business in the building on October 1. Retail tenants at Silver Tower Center include a Biedronka store which occupies 1,100 sqm of space.

The company is developing a scheme in Warsaw Image: Cushman & Wakefield IT company Luxoft is going to soon take up a total of approximately 1,800 sqm of office space on three floors of the investment, said Aleksandra Sikora, the lease manager at Silver Tower Center. She added that very advanced talks are currently underway with other tenants interested in leasing office space at the building. A number of letters of intent have already been signed, Sikora said. Kiev-based Wisher Enterprise has over 300,000 sqm of retail-entertainment, hotel and office space in Ukraine. The company is mostly active in Eastern and Central and Eastern Europe, in countries in-cluding Latvia. In Poland, Wisher Enterprise is cur-rently also developing an office scheme located on ul. Grzybowska in the Wola district of Warsaw

which will deliver almost 11,000 sqm of leasable space next year.

OFFICE

Sterlinga Business Sterlinga Business Sterlinga Business Sterlinga Business Center with BREEAM Center with BREEAM Center with BREEAM Center with BREEAM InInInIn----Use certificationUse certificationUse certificationUse certification

Developer Hines has recently secured an “Excel-lent” BREEAM In-Use certificate of energy effi-ciency and environmental performance for the Sterlinga Business Center office project in Łódź. The scheme is the first development in the city to have obtained such certification. Ewa Kowalska-Ocneanu, chief sustainability at WSP which was re-sponsible for the certification process, said Sterlinga Business Center is one of the few invest-ments in Poland that are certified in both the BREEAM New Construction and the BREEAM In-Use system. The nine-floor Sterlinga Business Center project is located on ul. Sterlinga in the downtown of Łódź. The scheme was completed in October 2010 and of-fers 13,400 sqm of leasable office space. The Sterlinga Business Center development is currently commercialized in 96%. Major tenants at the in-vestment include Philips, Takeda, Budimex, Tate & Lyle, Rule Financial and Sodexo. “BREEAM In-Use is the most widely used assess-ment scheme for existing buildings in Europe,” Milena Sikora, senior property manager at Savills and a Licensed International BREEAM Assessor, has recently told Poland Today. She added that also in Poland the popularity of the certification in on


the rise. Currently, a total of approximately 80 buildings in the country are certified in either the BREEAM New Construction or the BREEAM In-Use system, Sikora said.

The project was completed in October 2010 Image: Hines

RETAIL

Shopping centre space Shopping centre space Shopping centre space Shopping centre space supply in Poland supply in Poland supply in Poland supply in Poland continuing to growcontinuing to growcontinuing to growcontinuing to grow

A total of approximately 345,000 sqm of new shop-ping centre space will be delivered in Poland this year, with around 480,000 sqm scheduled to be completed in 2015, according to a recent report by JLL. Some 265,000 sqm of shopping centre areas has already been completed this year, including 64,000 sqm in Q3. Two new malls were last quarter delivered in the north-east of the country – Galeria Warmińska (41,000 sqm) in Olsztyn and Brama Mazur (17,250 sqm) in Ełk.

A total of more than 700,000 sqm of shopping cen-tre space in 32 projects is currently under construc-tion in Poland. This includes nine existing devel-opments which are being expanded, the JLL study said. The largest under-construction investment is the Posnania shopping centre in Poznań which will deliver 100,000 sqm of space. Major ongoing pro-jects also include Sukcesja in Łódź and Zielone Arkady in Bydgoszcz. There is still a steady demand for new shopping centre space in Poland. Recent months have been busy for both new market entrants and those al-ready present in the market, according to Marta Augustyn, associate director, retail agency, at JLL. “Retail chains in Poland are believed to be in good condition and the country remains an attractive market for further expansion,” Augustyn said. She added that prime assets located in the main metro-politan areas are attracting the most retailer atten-tion.

Galeria Warmińska in OIsztyn Image: JLL The total retail space supply in Poland currently stands at 12.2 million sqm of GLA, with shopping centres (376 projects) accounting for 8.76 million

sqm of leasable space, according to JLL data. The shopping centre density now stands at 227 sqm per 1,000 inhabitants, with the figure expected to rise to 245 sqm when the under-construction schemes are completed. It will still be lower than the Western European average of 260 sqm.

Marta Augustyn, JLL Image: JLL

LOGISTICS

Rising investor Rising investor Rising investor Rising investor interest in warehouse interest in warehouse interest in warehouse interest in warehouse property in Polandproperty in Polandproperty in Polandproperty in Poland

The total value of investment transactions closed in the warehouse property market in Poland this year is likely to exceed the record volume of approxi-


mately €607 million that was seen in the sector in 2013, according to a recent report by Savills. Ware-house transactions finalized in Q1-Q3 2014 were valued at a total of over €530 million, with the sec-tor having accounted for more than 27% of the total investment volume recorded in the commercial property market in that period, the study said. The volume of investment transactions in the warehouse sector was much higher than the volume of investment transactions in the retail sector which was dominant last year, according to the Savills re-port. This year is the third consecutive year of in-creased investor interest in prime logistics and light industrial assets in Poland, with the trend expected to continue next year, said Michał Ćwikliński, man-aging director, head of investment, at Savills Po-land.

Michał Ćwikliński, Savills Poland Image: Savills Warehouse parks located in the major logistics hubs across Poland currently offer a decent yield premi-um over prime office and retail assets in the respec-

tive markets, the Savills report said. Savills experts pointed to the improving transport infrastructure as well as supportive economic and market indicators as some of the major factors behind the rising inves-tor interest in warehouse and light industrial assets in Poland. Portfolio acquisitions dominated the investment ac-tivity in the warehouse sector in Q1-Q3 2014. Sever-al large transactions are yet expected to take place before the end of this year, the report said. The largest deals this year have included the acquisi-tions by Logicor (the European logistics platform of Blackstone) of logistics portfolios from Standard Life Investments and Pramerica Real Estate Inves-tors.

RESIDENTIAL

Dom DeDom DeDom DeDom Development velopment velopment velopment mulling expansion to mulling expansion to mulling expansion to mulling expansion to new regional marketsnew regional marketsnew regional marketsnew regional markets

Warsaw Stock Exchange-listed residential develop-er Dom Development, which is currently active in the Polish capital and in Wrocław, is considering expanding to new regional markets in Poland in the future. The company is looking at a number of cities including Kraków which is a very attractive market at the moment, said Jarosław Szanajca, president of the management board at Dom Development. Also Tri-city and Poznań look interesting, Szanajca said. Meanwhile, Dom Development continues to look for sites for new residential projects in Warsaw. The company previously announced it would spend up to 170 million zloty on land purchases this year.

However, the building land market is hot at the moment and not all of the planned transactions have successfully been closed, Szanajca admitted. So far this year, Dom Development has spent ap-proximately 60 million zloty on land acquisitions, he said.

The Żoliborz Artystyczny project in Warsaw Image: Dom Development The third quarter of this year was successful, with the apartment sales results of both Dom Develop-ment and other residential developers having been very good in the period, Szanajca said. The market is well balanced when it comes to the supply and the demand, he added. Dom Development sold 495 apartments in Q3 (and a total of 1,358 apartments in Q1-Q3), which marked an almost 20% increase up-on the same period of last year. The most housing units were offloaded in the Saska, Derby, Żoliborz Artystyczny and Wilno projects. The improving sales results have made Dom Devel-opment step up its development activity. The com-pany launched construction on a record eleven schemes in Q1-Q3 which will deliver a total of 1,655 apartments. One more development is scheduled to be launched later this year. As of the end of Sep-tember, Dom Development was developing 3,128


apartments, while a further 4,838 housing units were at the planning stage.

INTERVIEW

Logistics the hLogistics the hLogistics the hLogistics the hottest ottest ottest ottest subsubsubsub----sector in CEE real sector in CEE real sector in CEE real sector in CEE real estate marketsestate marketsestate marketsestate markets

Ahead of the upcoming CEE GRI 2014 real estate investment meeting in Warsaw, of which Poland Today is a media partner, we are publishing an in-terview that GRI has conducted with Maciej Tuszyński, executive director, head of Poland, at Westdeutsche ImmobilienBank. Tuszyński speaks about some of the big picture and current issues re-lated to the property markets of Central and East-ern Europe, including where the best opportunities and the most promising new real estate projects are. GRI: Outside of Poland, which CEE country will GRI: Outside of Poland, which CEE country will GRI: Outside of Poland, which CEE country will GRI: Outside of Poland, which CEE country will provide the best opportunity for investors in provide the best opportunity for investors in provide the best opportunity for investors in provide the best opportunity for investors in 2015, and why?2015, and why?2015, and why?2015, and why? Maciej Tuszyński: Maciej Tuszyński: Maciej Tuszyński: Maciej Tuszyński: Romania. It has gone through a major asset price adjustment and therefore now provides for purchases at attractive yields. Fur-thermore, the second largest country by population in CEE has the potential to create the largest num-ber of opportunities, while the economy will be rap-idly developing to catch-up with the EU average. What arWhat arWhat arWhat are the hottest sube the hottest sube the hottest sube the hottest sub----sectors in CEE rsectors in CEE rsectors in CEE rsectors in CEE reeeegion gion gion gion real estate?real estate?real estate?real estate? Logistics, in my opinion. With the new retail chains expanding, new projects are being developed, not

only on a build-to-suit basis but also partially [on a ] speculative [basis]. Furthermore, on the basis of re-cent investment transactions there seems to be quite a significant demand for such an asset class.

GRI talks to: Maciej Tuszyński, executive direc-tor, head of Poland, at Westdeutsche ImmobilienBank Where are the best opportunistic invesWhere are the best opportunistic invesWhere are the best opportunistic invesWhere are the best opportunistic investtttmentmentmentments in s in s in s in CEE?CEE?CEE?CEE? This is a tricky question. It depends on how we de-fine “an opportunity.” Furthermore, each so-called opportunistic investor will have their own risk pro-file and preferences. I would think that there will be still many opportunities as usual for the real estate market i.e. the development /redevelopment of as-

sets. Corporate real estate seems to be the next niche to be explored. Finally, for the investors with a more conservative risk approach, I do believe that investment in underperforming, but strategically located office assets in the capital cities will provide substantial opportunities in the mid-term. Which countries do you think will provide the Which countries do you think will provide the Which countries do you think will provide the Which countries do you think will provide the future international invesfuture international invesfuture international invesfuture international investtttment in CEE?ment in CEE?ment in CEE?ment in CEE? I do not think that it will change much. Nor will it really matter. If there is some new money coming from the Far East or Persian Gulf countries, it will most probably be channeled through funds man-aged by London-based fund managers, thus from the local CEE perspective the names of the inves-tors will remain the same. How is the lending envHow is the lending envHow is the lending envHow is the lending enviiiironment in CEE and are ronment in CEE and are ronment in CEE and are ronment in CEE and are there any new players on the scthere any new players on the scthere any new players on the scthere any new players on the sceeeene?ne?ne?ne? The lending environment seems to be back on track in CEE. There are a number of active lenders in each market, willing to provide loans against oper-ating assets, as well as to offer development facili-ties. [When it comes to] new players, I am sure that we shall see debt funds taking their place on the stage finally, so banks, which are the traditional lenders, will finally not be the only loan providers in CEE. Poland Today is a media partner of the CEE GRI 2014 real estate investment meeting in Warsaw

LATEST LEASE DEALS IN BRIEF BBK BBK BBK BBK has recently taken up a combined 20,700 sqm of built-to-suit warehouse and office space in a newly developed building located within the Park


Logistyczny Gdańsk-Kowale logistics park in Gdańsk. Kraków-based 7R Logistic is the developer and investor of the Park Logistyczny Gdańsk-Kowale complex. The portfolio of the company also includes Centrum Logistyczne Kraków-Kokotów and Centrum Logistyczno-Biurowe Sosnowiec-Milowice. Arla Foods Arla Foods Arla Foods Arla Foods is going to take up 3,500 sqm of office space at Centrum Biurowe Neptun in Gdańsk. The transaction, in which the tenant was advised by CBRE, is the largest lease deal closed in the Tri-city market this year. Centrum Biurowe Neptun was completed in January this year and comprises 16,000 sqm of office space. The building is owned by Hines and is the first class-A high-rise office pro-ject in Tri-city.

Konstruktorska Business Center in Warsaw Image: HB Reavis PZU PZU PZU PZU has leased more than 1,700 sqm of office space at Empark Mokotów Business Park in Warsaw. JLL is the exclusive leasing agent of the complex which is the largest office park in Poland. Empark Mokotów Business Park is located in the Mokotów district of the Polish capital and comprises nine buildings, offering a combined 115,000 sqm of office

space. The complex was developed by Globe Trade Centre and is owned by Heitman and Immoeast.

Empark Mokotów Business Park in Warsaw Image: JLL Panasonic MarkePanasonic MarkePanasonic MarkePanasonic Marketing Europe ting Europe ting Europe ting Europe has renewed its lease of 1,470 sqm of office space at Platinium Busi-ness Park in Warsaw. Cushman & Wakefield repre-sented the tenant in the negotiations process. Platinium Business Park is located in the Mokotów district of the Polish capital and offers a total of nearly 55,000 sqm of leasable space in five build-ings. The complex belongs to Allianz Real Estate. Fabryka Formy Fabryka Formy Fabryka Formy Fabryka Formy will take up more than 1,350 sqm of space at the Atrium Copernicus shopping centre in Toruń in northern Poland. The mall is owned by Atrium European Real Estate. The Atrium Coperni-cus shopping centre currently comprises over 30,000 sqm of leasable space, occupied by tenants including Auchan and Media Markt. The mall is be-ing expanded by another 17,000 sqm. Two new tenants – Zdrofit Zdrofit Zdrofit Zdrofit and Bilans Firma Bilans Firma Bilans Firma Bilans Firma DoradczoDoradczoDoradczoDoradczo----Księgowa Księgowa Księgowa Księgowa –––– will soon move into Konstruktorska Business Center in Warsaw. The companies will respectively take up around 1,000 sqm and 450 sqm of space at the building. Konstruktorska Business Center is located in the

Mokotów district of Warsaw and comprises 48,000 sqm of leasable space which is occupied by tenants including Procter & Gamble, Grupa Żywiec, Otis and Carrier. The building was developed and is owned by HB Reavis.

COMING & GOING

Scott DwyerScott DwyerScott DwyerScott Dwyer

Scott Dwyer has recently been appointed as the country CEO in Poland at Atrium European Real Estate. He has joined the company from Heitman International where he was executive vice presi-dent and head of portfolio management. Dwyer has more than fifteen years of experience in the proper-ty markets of Central and Eastern Europe. He pre-viously worked at companies including ING Real Estate Development International and Unibail-Rodamco.

weekly newsletter # 033/ 27th October 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 argest argest argest office lease dealsoffice lease dealsoffice lease dealsoffice 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


Highest retail rents (EUR/sqm/month), H1 2014Highest retail rents (EUR/sqm/month), H1 2014Highest retail rents (EUR/sqm/month), H1 2014Highest retail rents (EUR/sqm/month), H1 2014

20

30

40

50

60

70

80

90

100

Other citiesŁódź

WrocławTri-city

SzczecinPoznańKraków

KatowiceWarsaw

Source: Cushman & Wakefield

Office rents (EUR/sqm/month), H1 2014Office rents (EUR/sqm/month), H1 2014Office rents (EUR/sqm/month), H1 2014Office rents (EUR/sqm/month), H1 2014

10 15 20 25

ŁódźKatowice

Tri-cityKrakówPoznań

WrocławWarsaw - non-central

Warsaw - central locations

Source: Cushman & Wakefield

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 123,000 Goodman Wrocław South

Logistic Center

Poznań Amazon 123,000 Panattoni Poznań

Wrocław Amazon 123,000 Panattoni Wrocław

Poznań supermarket

chain 82,385 -

Central Po-

land Castorama 49,961 Panattoni Park Stryków


pt urban issues no. 033

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