PT Urban Issues No. 004

No. 004 / 3rd March 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

Newsletter Editor: Adam Zdrodowski

[email protected]

tel. +48 504 182 308

OFFICE Polski Holding Nieruchomości has launched construction on a new office project in the Mokotów district of Warsaw and is planning another scheme in the same neighbourhood page 2

LOGISTICS Central Europe saw record industrial space lease levels last year page 2 Panattoni Europe is building another phase of its Panattoni Park Łódź East investment page 3

RETAIL There is still room for new shopping centres in Warsaw, according to a recent Jones Lang LaSalle report page 3

RESIDENTIAL Dom Development has acquired a host of new sites for future projects in Warsaw. The company will launch eight schemes in the first half of this year page 4

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

COMING & GOING Piotr Kaszyński, Cushman & Wakefield page 6

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

Centrum Praskie Koneser Photo: BBI Development

The bright future of PragaThe bright future of PragaThe bright future of PragaThe bright future of Praga Poland Today talks to Rafał Szczepański, vice president of the management board at developer BBI Development, about the Centrum Praskie Koneser project in Warsaw and the prospects for the development of the Praga part of the Polish capital. page 4

weekly newsletter # 004 / 3rd March 2014 / page 2

OFFICE

PHN launches PHN launches PHN launches PHN launches construction on office construction on office construction on office construction on office project in Warsawproject in Warsawproject in Warsawproject in Warsaw

The Domaniewska Office Hub project will com-prise more than 28,800 sqm of usable space

Image: PHN

Warsaw Stock Exchange-listed, state-controlled real estate group Polski Holding Nieruchomości (PHN) has launched construction on its Doma-niewska Office Hub project in the Polish capital. The scheme is located on ul. Domaniewska in the Mokotów district of Warsaw and is expected to de-liver more than 28,800 sqm of usable space in the second half of next year. Almost a half of the space in the development has already been leased by the Polish Post. Work on the underground part of the investment is already underway, with a consortium of construc-tion companies Unibep and Keller building the slurry walls, said Artur Lebiedziński, CEO at PHN.

His company is now in the process of selecting a general contractor for the Domaniewska Office Hub project and expects to finish the procedure in the next few weeks, Lebiedziński added. Meanwhile, PHN is now also planning another of-fice scheme in the same neighbourhood which will be located on ul. Wilanowska and will comprise two buildings offering a total of more than 27,500 sqm of leasable space. Alternatively, the company could develop a retail investment with approximately 30,000 sqm of GLA on the site. The final decision regarding the shape of the planned development has not yet been made.

LOGISTICS

Record industrial Record industrial Record industrial Record industrial space lease levels in space lease levels in space lease levels in space lease levels in Central EuropeCentral EuropeCentral EuropeCentral Europe

More than four million sqm of industrial space was taken up in Central Europe last year, which is the best result to have been recorded in the region in the last 20 years, according to a recent report by Cushman & Wakefield. Ferdinand Hlobil, partner, head of industrial in Central Europe at the com-pany, said that the CE region, defined by Cushman & Wakefield as comprising Poland, the Czech Re-public, Slovakia and Romania, is benefiting from the shifting of production from Western Europe. Hlobil also pointed to the demographic clout of the region. The populations of Germany (81 million consumers) and Central Europe (84 million con-sumers) are of nearly the same size, he said. The

strength of Central Europe is also evidenced by the large size of industrial lease deals that are signed in the region these days. Amazon, for example, last year leased 300,000 sqm of space in Poland and could soon take up another 200,000 sqm of space in the Czech Republic.

The supply of new industrial space in Poland is set to increase significantly in the next few months

Image: Cushman & Wakefield

In Poland, approximately 2,140,000 sqm of indus-trial space was leased in 2013, with net absorption having amounted to 290,000 sqm. The Warsaw market was the most active – 24% of all transac-tions were signed there. The most active tenants came from the logistics and e-commerce sectors which respectively accounted for 29% and 16% of the total take-up in Poland last year. Apart from the huge Amazon deal, major transactions included the lease of 82,000 sqm by retailer Intermarche. Approximately 354,000 sqm of industrial space was delivered in Poland in 2013, which was around 30% less than in the preceding year. However, 535,000 sqm was under construction as of end of last year


and the supply is expected to increase significantly in the next few months. Tom Listowski, head of in-dustrial in Poland at Cushman & Wakefield, said that new locations are emerging as potential logis-tics or production destinations. Rzeszów and Lublin in eastern Poland, for example, are now definitely on the radar of developers and also occupiers, he said.

Tom Listowski, head of industrial in Poland at Cushman & Wakefield

Image: Cushman & Wakefield

LOGISTICS

Panattoni launches Panattoni launches Panattoni launches Panattoni launches new phase of Łódź new phase of Łódź new phase of Łódź new phase of Łódź distribution centredistribution centredistribution centredistribution centre

Industrial space developer Panattoni Europe has recently launched construction on the fourth phase of its Panattoni Park Łódź East distribution centre

in Łódź in central Poland. The phase will deliver 8,300 sqm of space and has already been fully leased out. Panattoni Park Łódź East is located in the east-ern part of Łódź , close to a planned motorway junc-tion, and will comprise a total of almost 160,000 sqm of space in four buildings when it is fully de-veloped. Tenants at the latest phase will include outsourcing company CERI International which has leased 3,050 sqm. Panattoni Europe is now also building 11,300 sqm for household appliances and consumer electronics distributor TERG-Mediaexpert within the same park. Altogether, Panattoni Europe is cur-rently developing more than 343,000 sqm of indus-trial space in Poland and the Czech Republic, for clients including Amazon, Castorama Polska and Polaris.

The fourth phase of Panattoni Park Łódź East will deliver 8,300 sqm of space

Image: Panattoni Europe

RETAIL

Warsaw with room for Warsaw with room for Warsaw with room for Warsaw with room for more shopping centres: more shopping centres: more shopping centres: more shopping centres: reportreportreportreport

With its shopping centre space density of 437 sqm per 1,000 inhabitants, Warsaw ranks low among the largest cities in Poland and still has room for retail projects, according to a recent report by Jones Lang LaSalle. The development of new residential areas and the continuous improvement of the road infra-structure have led to the emergence of new retail locations in the Polish capital, the study said. According to the Jones Lang LaSalle report, this trend is evidenced by, among other things, the plans of developer Globe Trade Centre to build two new large-scale shopping centres in Warsaw. The com-pany is planning to develop its Galeria Wilanów and Galeria Północna malls in the Wilanów and Bia-łołęka districts, respectively. Several existing assets, including Wola Park and Atrium Promenada, are set to be enlarged, Jones Lang LaSalle experts noted in the report. In the last quarter of last year, the shopping centre stock in Warsaw grew by 20,500 sqm of leasable space. Over the whole year, a total of 59,000 sqm of retail GLA was completed in the city. The largest new retail projects delivered in Warsaw last year included the Plac Unii City Shopping scheme (15,500 sqm) which was the first inner-city mall to have been completed in the Polish capital since the opening of Złote Tarasy in 2007.


Plac Unii City Shopping was one of the largest re-tail schemes completed in Warsaw last year Image: Liebrecht & wooD

RESIDENTIAL

Dom Development Dom Development Dom Development Dom Development goes on a land buying goes on a land buying goes on a land buying goes on a land buying spreespreespreespree

Warsaw Stock Exchange-listed residential devel-oper Dom Development has revealed it has ac-quired a host of new sites for future multi-family housing projects across the Polish capital in recent months. The company has bought plots for three new schemes in the Mokotów district – one on ul. Garażowa and two ul. Bukowińska – and a plot for a development located in the area of ul. Włodar-zewska and ul. Drawska in the Ochota district. Last year, Dom Development spent a total of 150 million zloty on the purchase of land, but the figure also includes down payments for sites whose acqui-

sition has not yet been finalized, said Janusz Zalewski, vice president and financial director at the company. Jarosław Szanajca, president of the management board at Dom Development, said that the developer is now interested in the acquisition of land for projects in the Ursynów and Bemowo dis-tricts of Warsaw, as well as for a luxury scheme in the downtown of the city. He added that the company is now seeing the situa-tion in the residential market improve and wants to be well prepared for a potential further increase in the demand for new apartments in the upcoming months. Last year was already very good for Dom Development. The company sold 1,605 apartments in the period, with the 466 housing units offloaded in the last quarter of 2013 having been the best sales result of the developer in the last two years.

Dom Development is now developing projects in-cluding the Osiedle Wilno scheme in Warsaw

Image: Dom Development

In the first half of this year, Dom Development plans to launch construction on a combined eight residential projects in Warsaw and Wrocław, the

two markets in which the company is active. These will include three new schemes – two in Warsaw and one in Wrocław – and five new phases of al-ready ongoing investments. In the second half of 2014, the company wants to start construction on approximately 400 apartments.

INTERVIEW

The bright The bright The bright The bright development prospects development prospects development prospects development prospects of Praga in Warsawof Praga in Warsawof Praga in Warsawof Praga in Warsaw

Developer Liebrecht & wooD, the partner with whom Warsaw Stock Exchange-listed developer BBI Development wants to revitalize and redevelop its Centrum Praskie Koneser project in the Polish capital, has recently positively concluded due dili-gence on the scheme. According to Rafał Szczepański, vice president of the management board at BBI Development, construction on the commercial part of the investment could launch at the turn of 2014 and 2015. BBI Development is already building the residential part of the mixed-use project and wants to team up with Liebrecht & wooD on the delivery of the office and retail components of the scheme. In an inter-view with Poland Today, Szczepański argues that the Praga part of the Polish capital, where the Cen-trum Praskie Koneser site is located, has bright pro-spects and he reveals that BBI Development itself is now planning another project there. Poland TodayPoland TodayPoland TodayPoland Today: When do you expect to sign the : When do you expect to sign the : When do you expect to sign the : When do you expect to sign the final agreement with Liebrecht & wooD and final agreement with Liebrecht & wooD and final agreement with Liebrecht & wooD and final agreement with Liebrecht & wooD and


when could construction on the commercial part when could construction on the commercial part when could construction on the commercial part when could construction on the commercial part oooof Centrum Praskie Koneser be launched?f Centrum Praskie Koneser be launched?f Centrum Praskie Koneser be launched?f Centrum Praskie Koneser be launched? Rafał Szczepański: Rafał Szczepański: Rafał Szczepański: Rafał Szczepański: Liebrecht & wooD has positive-ly concluded due diligence on the commercial part of Centrum Praskie Koneser. The negotiations are at the last stage and we hope that they will be final-ized soon. Work on the design of the commercial part is proceeding apace. This year we want to se-cure the financing and finalize all the administra-tive procedures. Construction should launch at the turn of 2014 and 2015 and finish in 2017. This is a very realistic schedule.

The Centrum Praskie Koneser project will deliver 22,000 sqm of office space, among other things

Image: BBI Development

Centrum Praskie Koneser will be the first new Centrum Praskie Koneser will be the first new Centrum Praskie Koneser will be the first new Centrum Praskie Koneser will be the first new office and retail project of this scale in Praga. office and retail project of this scale in Praga. office and retail project of this scale in Praga. office and retail project of this scale in Praga. Which impact will it have on that part of WaWhich impact will it have on that part of WaWhich impact will it have on that part of WaWhich impact will it have on that part of War-r-r-r-saw and can we expect more nesaw and can we expect more nesaw and can we expect more nesaw and can we expect more new investments w investments w investments w investments there?there?there?there? Good times are coming for Praga. Our investment coincides with very important projects carried out by Warsaw City Hall. Soon after the completion of the first phase of the residential part of Centrum Praskie Koneser – in autumn this year – the central

stretch of the second underground line will be de-livered. The underground will connect Praga with the very downtown of Warsaw, transporting within several minutes approximately ten million people per year from Dworzec Wileński to Powiśle, ul. Nowy Świat and ul. Marszałkowska. Taking into consideration the impact which the construction of the first underground line had on the Bielany district, Warsaw City Hall predicts that the number of businesses in Praga will increase by approximately 25% and the value of the properties there will increase by around 15%. In consequence, the revenues of the inhabitants will increase too. The Wileński Square will change and there is pres-sure on the part of the local communities to make ul. Targowa more friendly to pedestrians and cy-clists.

Poland Today talks to: Rafał Szczepański, vice president of the management board at BBI De-velopment Around the same time, the Museum of Praga will be opened and in 2015 a new creativity centre on ul. Targowa will be ready. In 2017, the whole Centrum Praskie Koneser, with its 342 apartments (lofts and

soft lofts), more than 22,000 sqm of retail space (housing boutiques, restaurants and points of ser-vice) and 22,000 sqm of office space, will be com-pleted. All these investments will attract people to Praga, both those wishing to work in the area and those wishing to live there.

KONESER The Centrum Praskie Koneser site is located between

ul. Ząbkowska, ul. Nieporęcka, ul. Białostocka and ul.

Markowska in the Praga Północ district of Warsaw and

comprises almost five hectares of land. It used to house

the Koneser vodka distillery which was built in the late

19th century. BBI Development will preserve some of the

historic buildings of Koneser - since 2010 the company

has revitalized the former guardhouse and the adminis-

trative building of the factory.

Is BBI Development itself planning any other iIs BBI Development itself planning any other iIs BBI Development itself planning any other iIs BBI Development itself planning any other in-n-n-n-vestments in Praga?vestments in Praga?vestments in Praga?vestments in Praga? Yes, but it is yet too early to reveal any details. Why has Praga not become a major office locWhy has Praga not become a major office locWhy has Praga not become a major office locWhy has Praga not become a major office loca-a-a-a-tion yet, despite its proximity to the dowtion yet, despite its proximity to the dowtion yet, despite its proximity to the dowtion yet, despite its proximity to the downnnntown town town town of Warsaw?of Warsaw?of Warsaw?of Warsaw? This is all about mentality – for a long time that part of Warsaw was perceived as a “Bermuda Triangle.” Due to the lack of public investments, the buildings were falling into ruin. Because of the Bierut Decree, the legal status of many properties remained unreg-ulated. For many people the Vistula River was an insurmountable barrier. However, in recent years that reality has begun to change very quickly. Un-derground stops near the National Stadium and at the Wileński Square will make the proximity to the downtown really tangible.


More and more buildings are being renovated by their new owners. Also the city wants to be more active now – Vice President Michał Olszewski is fi-nalizing work on a revitalization program for Praga. There is no shortage of attractive areas in that part of Warsaw – suffice it to mention Port Praski and the area of the National Stadium and the Warsaw East railway station. I am sure that, after Wola and Powiśle, it is now time for Praga, which has huge potential because of its exquisite location, to be-come a fashionable place to invest in.

RAFAŁ SZCZEPAŃSKI Rafał Szczepański studied at the Academy of Catholic

Theology in Warsaw and is also a graduate of post-

graduate studies at the Jagiellonian University in Kraków

and a property management course. He currently holds

management positions at a number of companies, in-

cluding Juvenes-Symfonia and Juvenes-Projekt.

LATEST LEASE DEALS IN BRIEF

Oxygen Park

Image: Yareal

Fujitsu Technology Solutions Fujitsu Technology Solutions Fujitsu Technology Solutions Fujitsu Technology Solutions has leased 1,300 sqm of space at building A of the Oxygen Park office complex which developer Yareal has recently de-veloped in the Włochy district of Warsaw. The Ox-ygen Park complex comprises two six-floor build-ings which offer a total of 18,300 sqm of leasable space. Colliers International is the main agent re-sponsible for leasing space at the investment. Ferdinand GrFerdinand GrFerdinand GrFerdinand Gross Polskaoss Polskaoss Polskaoss Polska has taken up approxi-mately 2,500 sqm of warehouse and office space at the SEGRO Industrial Park Wrocław in Lower Sile-sia, a joint venture between SEGRO and Polski Holding Nieruchomości. The park is sitting on a ten-hectare plot located in the north-eastern part of the city. The investment is expected to comprise a total of approximately 40,000 sqm of warehouse space when fully developed.

Adgar Park West

Image: The Adgar Group

GET ITGET ITGET ITGET IT, a company offering linguistics products and services to business, has leased more than 600 sqm of office space at the Adgar Park West complex which the Adgar Group is now redeveloping in Warsaw. The Adgar Park West complex is located on Al. Jerozolimskie in the Ochota district of the Polish capital and comprises 43,000 sqm of office space. The office park is now leased out in more than 60%.

COMING & GOING

Piotr KaszyńskiPiotr KaszyńskiPiotr KaszyńskiPiotr Kaszyński

Piotr Kaszyński has recently become the head of the capital markets team in Poland at Cushman & Wakefield. He joined the Warsaw office of the company in 1998 and led the Polish retail team from 1999, being involved in leasing space in over 40 re-tail properties in Poland. Kaszyński is a graduate of Florida Atlantic University in the United States.

Registration till 20 March 2014:www.prospectsinpoland.com

During the 3rd logistics conference in Gliwice, representatives of the City, sector experts, investors interested in the region, as well as those who have already put their money in, will discuss how to maximise the potential of the city and its surroundings.

Conference: Hub Silesia – logistics as a driver of the region's economic growth 26 March 2014, hotel Silvia Gold, Gliwice

Organizer Media Patrons

weekly newsletter # 004/ 3rd March 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


Documents

PT Urban Issues No. 004