PT Urban Issues No. 35

No. 035 / 17th November 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

Newsletter Editor: Adam Zdrodowski

[email protected]

tel. +48 504 182 308

OFFICE Echo Investment has signed Deloitte for its Q22 skyscraper project in Warsaw page 2 The year 2014 is going to be a record year for the office market in Kraków page 3

HOSPITALITY Starwood Capital Group is selling Louvre Hotels Group to China’s Jin Ji-ang page 3

REAL ESTATE FI-NANCING Griffin Group is co-financing a new shopping centre project in Warsaw page 4

RESIDENTIAL Two new schemes will soon be launched in Warsaw’s Gocław neighbourhood page 4

Robyg has acquired land for a new residential investment in Gdańsk page 4

INTERVIEW Poland Today talks to Ian Scattergood, the new chairman of the RICS Polska board page 5

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

COMING & GOING Joanna Iwanowska, Tara HR Consulting page 6

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

The whole complex offers a total of over 30,000 sqm in two buildings Photo: Skanska Property Poland

Skanska Skanska Skanska Skanska ProProProProperty Poland selling part of perty Poland selling part of perty Poland selling part of perty Poland selling part of Kapelanka 42 office complex in KrakówKapelanka 42 office complex in KrakówKapelanka 42 office complex in KrakówKapelanka 42 office complex in Kraków Developer Skanska Property Poland has sold one of the two buildings of its Kapelanka 42 office complex in Kraków to the Polish fund REINO Dywidenda FIZ which is managed by RE-INO Partners. 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 # 035 / 17th November 2014 / page 2

INVESTMENT MARKET

Skanska selling part of Skanska selling part of Skanska selling part of Skanska selling part of its Kapelanka 42 office its Kapelanka 42 office its Kapelanka 42 office its Kapelanka 42 office complex in Krakówcomplex in Krakówcomplex in Krakówcomplex in Kraków

Developer Skanska Property Poland has sold one of the two buildings of its Kapelanka 42 office com-plex in Kraków to the Polish fund REINO Dywidenda FIZ which is managed by REINO Part-ners. The transaction, whose value has not been re-vealed, marks the first acquisition to have been made by the fund. For Skanska Property Poland, it marks the second sale of an office building within the last 12 months.

The complex comprises two buildings Image: Skanska Property Poland The sales deal underlines the increasing liquidity of the office real estate market in the regional cities and proves the growing investor interest in the best projects in Kraków, said Mike Atwell, head of capi-tal markets, CEE, at CBRE that advised the seller in the transaction. Mariusz Krzak, a regional director

at Skanska Property Poland, said that the interest of the domestic capital in Poland may prove a crucial factor for the development of the investment mar-ket in the regional cities in the country. The Kapelanka 42 project is the first office scheme of Skanska Property Poland in Kraków. The in-vestment comprises a total of more than 30,000 sqm of office space, with its buildings having been completed in Q2 and Q3 of this year. The recently transacted part of the development offers 11,700 sqm of office space. The building has already been almost fully commercialized, with its tenants in-cluding Tesco, Apriso and Signity. Part of the Skanska Group, Skanska Property Po-land has been active since 1997 and is currently pre-sent in six markets across Poland: Warsaw, Wrocław, Poznań, Łódź, Kraków and Katowice. REINO Partners specializes in asset and fund man-agement in the real estate market in Central and Eastern Europe. REINO Dywidenda FIZ is the first Polish dividend closed-end real estate investment fund dedicated to Polish high-net-worth individu-als. As a rule, all of REINO funds are created or in-creased with a particular objective in mind, which is presented to investors prior to a given transac-tion, said Radosław Świątkowski, the CEO of REINO Partners. “Consequently, we separately raise funding for each individual investment, of course with a certain preset safety margin and loan-to-value ratio, which usually gives us some leeway,” he added. The fund was created to finance the acquisition of the Kapelanka 42 building, while any further in-vestments will require additional issues. REINO Dywidenda FIZ invests in existing, income-generating office buildings, Świątkowski said. “If

we are given the opportunity to continue adding on to the fund, we would like to acquire from five to six buildings of this type for our investors over a pe-riod of less than three years,” he added.

OFFICE

Echo signs Deloitte for Echo signs Deloitte for Echo signs Deloitte for Echo signs Deloitte for Q22 skyscraper project Q22 skyscraper project Q22 skyscraper project Q22 skyscraper project in Warsawin Warsawin Warsawin Warsaw

The building will stand 155 metres tall Image: Echo Investment Warsaw Stock Exchange-listed developer Echo In-vestment has signed Deloitte as an anchor tenant for its flagship Q22 office project in the Polish capi-tal. Represented by JLL, the global consulting firm


has leased 11,000 sqm of office space at the scheme. The agreement is the first lease deal to have been signed at the under-construction development. Wojciech Gepner, public relations manager at Echo Investment, has recently told Poland Today the company is now in advanced talks with several po-tential large tenants. Designed by the renowned APA Kuryłowicz & As-sociates architectural studio, the Q22 investment is being built by contractor Modzelewski & Rodek in the downtown of Warsaw, on the site which previ-ously housed the Mercure hotel. The 155-metre project, whose value is estimated at 500 million zlo-ty, is scheduled to be completed in the first quarter of 2016. The scheme will deliver more than 50,000 sqm of leasable office space. Echo Investment has recently secured a BREEAM Interim Excellent certificate of energy efficiency and environmental performance for the develop-ment, with Buro Happold having been responsible for the certification process. The Q22 investment is one of two office skyscraper projects now under construction in Warsaw. The other one is the War-saw Spire scheme which is being developed by Ghelamco Poland.

OFFICE

ReReReRecord year for cord year for cord year for cord year for Kraków office market: Kraków office market: Kraków office market: Kraków office market: reportreportreportreport

The year 2014 is proving to be a record one for the office market in Kraków, with the city now seeing the highest developer and tenant activity in several

years, according to a recent report by JLL. Kraków continues to benefit from the fact that it remains a key location for the business services sector in Po-land and it can currently boast of the lowest vacan-cy rate among the office markets in the country, the study said.

Rafał Oprocha, head of the Kraków office at JLL Image: JLL Kraków remains the largest regional office market in Poland, with the total existing office stock in the city estimated at approximately 648,000 sqm and expected to exceed 671,00 sqm this year, according to JLL data. In 2014, the office stock in Kraków is likely to grow by a combined 105,000 sqm, which would be the highest annual level of new supply in the whole history of the market, the JLL report said. Over 106,000 sqm of office space is currently under construction in Kraków. In 2015 and in 2016, re-spectively 83,000 sqm and 93,000 sqm of office are-as are scheduled to be delivered in the city. The most recently completed new office projects in Kraków include Kapelanka A (17,300 sqm), Enter-prise Park II C (13,600 sqm), Quattro Business Park D (12,200 sqm) and Orange Office Park I (8,100 sqm), the study said.

A record 85,000 sqm of office space, excluding re-negotiations, was leased in the Kraków market in the first three quarters of this year. In 2012 and 2013, the annual net take-up level in the city amounted to approximately 80,000 sqm. Kraków now has the lowest vacancy rate in Poland which stands at 6% and is likely to remain stable within the next few months. Tenants currently find it diffi-cult to take up more than 3,000 sqm of class-A space in a completed office building in the city, ac-cording to the report. The demand for new office space in Kraków con-tinues to be predominantly driven by the business services sector which already employs tens of thou-sands of people in the city, said Rafał Oprocha, head of the Kraków office at JLL. According to JLL data, business services sector tenants currently account for 55% of all occupied office areas in Kraków. Last year, the sector accounted for as much as 70% of the total office take-up in that market, Oprocha said.

HOSPITALITY

Chinese giant acquires Chinese giant acquires Chinese giant acquires Chinese giant acquires budget hotels operator budget hotels operator budget hotels operator budget hotels operator Louvre Hotels GroupLouvre Hotels GroupLouvre Hotels GroupLouvre Hotels Group

The American private investment firm Starwood Capital Group has agreed to sell Paris-based budget hotel operator Louvre Hotels Group to Jin Jiang In-ternational Hotels, the leading hotel operator and manager in China. The value of the transaction, which is expected to be finalized in the first quarter of next year, has not been disclosed. However, it is being speculated in the market that the buyer is go-ing to pay more than €1.2 billion.


Louvre Hotels Group has over 1,100 hotels in 47 countries and is one of the largest hotel companies in Europe. It is known for its Premiere Classe, Campanile, Kyriad, Golden Tulip, Tulip Inn and Royal Tulip brands. In Poland, Louvre Hotels Group currently has a combined 16 hotels (of the Campanile, Golden Tulip and Premiere Classe brands). Last year, the company opened a Campani-le hotel in Bydgoszcz and Golden Tulip hotels in Gdańsk and Kraków.

REAL ESTATE FINANCING

Griffin Group coGriffin Group coGriffin Group coGriffin Group co----financing new Warsaw financing new Warsaw financing new Warsaw financing new Warsaw shopping mall schemeshopping mall schemeshopping mall schemeshopping mall scheme

Real estate investor Griffin Group has granted a €46-million loan to Rosehill Investments, which will help finance the acquisition of a 51,000-sqm plot of land for a new shopping centre project in Warsaw, as well as preparatory work on that scheme. The loan was granted through a recently created platform – Griffin Property Finance II – which has a total of €200 million at its disposal. The transaction with Rosehill Investments is the first deal in which the platform has been involved. Griffin Property Finance II can grant loans at both the land acquisition and construction phases of the investment process. The platform can also finance existing developments which generate cash flow, said Przemysław Krych, the CEO of Griffin Group. As of the beginning of next year, Griffin Property Finance II will be headed by Maciej Tuszyński who will join Griffin Group from Westdeutsche

ImmobilienBank where he is an executive director and head of Poland. Griffin Group was founded in 2006 as a platform for investing in the real estate market. In March last year, the company secured the Oaktree Capital Management hedging fund as an strategic investor. The portfolio of Griffin Group comprises retail pro-jects including Hala Koszyki in Warsaw, Dom Handlowy Renoma in Wrocław and Supersam in Katowice. The company also owns a number of of-fice buildings and major pieces of building land across Poland.

RESIDENTIAL

Gocław neighbourhood Gocław neighbourhood Gocław neighbourhood Gocław neighbourhood of Warsaw witof Warsaw witof Warsaw witof Warsaw with two h two h two h two new housing projectsnew housing projectsnew housing projectsnew housing projects

Kolorowy Gocław will deliver almost 400 homes Image: Yareal Two major developers active in the Polish market – Unidevelopment and Yareal – have recently ob-tained building permits for new multi-family resi-dential projects located in the Gocław neighbour-

hood of Warsaw. Located in the Praga Południe dis-trict of the Polish capital, the neigbhourhood has become very popular with residential developers in recent years, with Warsaw Stock Exchange-listed Dom Development, for one, now selling apartments in three large-scale schemes there. Unidevelopment will develop an investment called Osiedle 360°, whose first phase will comprise a total of 118 apartments in two buildings. The phase is scheduled to be completed in the first quarter of 2016. There is ample buyer interest in the planned development, with almost 40% of the housing units having already been reserved, said Ewa Przeździecka, sales and marketing director at Unidevelopment. For its part, Yareal is going to develop a project called Kolorowy Gocław which will comprise a to-tal of almost 400 apartments in six buildings. The company will built the development in two phases. Construction on the first phase of the project, which is the largest residential scheme in the histo-ry of Yareal, is scheduled to commence in the first half of next year. The company has to date pre-sold 30% of the apartments in the development.

RESIDENTIAL

Robyg buys land for Robyg buys land for Robyg buys land for Robyg buys land for new residentinew residentinew residentinew residential project al project al project al project in Gdańskin Gdańskin Gdańskin Gdańsk

Warsaw Stock Exchange-listed developer Robyg has signed a preliminary agreement regarding the acquisition of approximately 20,000 sqm of build-ing land for a new residential project in Gdańsk.


The company is going to pay more than 13 million zloty for the site in question which is located in the Piecki-Migowo (also known as Morena) district of the city and can house a scheme comprising over 500 apartments. The planned development will be the fourth resi-dential investment of Robyg in Gdańsk. The com-pany is currently selling housing units in the Słoneczna Morena, Lawendowe Wzgórza and Alba-tross Towers multi-family projects in the city. The schemes are respectively located in the Piecki-Migowo, Jasień and Przymorze parts of Gdańsk. In the first three quarters of this year, the company of-floaded a total of more than 730 apartments in the city. One of the main elements of the current strategy of Robyg is the strengthening of its position in the housing market in Gdańsk, said Oscar Kazanelson, president of the supervisory board at the company. Robyg now has a 20% share of the Gdańsk market and wants to retain that level in the upcoming years. The company is planning to increase its land bank in the city, Kazanelson said.

INTERVIEW

Ethics increasingly Ethics increasingly Ethics increasingly Ethics increasingly important for property important for property important for property important for property industry in Polandindustry in Polandindustry in Polandindustry in Poland

Poland Today talks to Ian Scattergood, the newly appointed chairman of the RICS Polska board, about how Poland is doing when it comes to the adoption of the high ethical standards promoted by the organization.

Poland Today: Poland Today: Poland Today: Poland Today: What aWhat aWhat aWhat are there there there the majormajormajormajor goalsgoalsgoalsgoals which which which which you would like toyou would like toyou would like toyou would like to achievachievachievachieveeee during your term during your term during your term during your term as as as as chaichaichaichairrrrman ofman ofman ofman of the the the the RICS PolskaRICS PolskaRICS PolskaRICS Polska boardboardboardboard???? Ian Scattergood: Ian Scattergood: Ian Scattergood: Ian Scattergood: At the top level our goals in Po-land are very much in line with the goals of RICS in the rest of Europe. These can be summarised as: RecognitionRecognitionRecognitionRecognition – promotion of our ethical and profes-sional standards and getting their value recognised and asked for as widely as possible, ProductsProductsProductsProducts – ed-ucation, events, online tools, guidebooks and other professional tools for members and the industry as a whole, and last but not least, MembeMembeMembeMembershiprshiprshiprship – growth, satisfaction, engagement and communica-tion.

Poland Today talks to: Ian Scattergood, chairman of the RICS Polska board Would you say that the significance of profeWould you say that the significance of profeWould you say that the significance of profeWould you say that the significance of profes-s-s-s-sionalism and high ethical standards in the real sionalism and high ethical standards in the real sionalism and high ethical standards in the real sionalism and high ethical standards in the real estate industry has iestate industry has iestate industry has iestate industry has increased in recent years?ncreased in recent years?ncreased in recent years?ncreased in recent years?

This is hard to measure or provide statistical evi-dence but based on my experience, definitely it has increased. That’s not to say it cannot be further im-proved, it can, and that’s why we are here. How is Poland doing in terms ofHow is Poland doing in terms ofHow is Poland doing in terms ofHow is Poland doing in terms of its adoption of its adoption of its adoption of its adoption of those standards, in comparison to other Europthose standards, in comparison to other Europthose standards, in comparison to other Europthose standards, in comparison to other Europe-e-e-e-an countries?an countries?an countries?an countries? Poland is doing as well as any other country in adopting standards both in terms of acceptance by members and available materials to help them. As examples: our recent event to discuss ethics was one of the most widely attended in the whole year with more than 80 people attending, as was the event to launch the latest revision of one of the RICS’ most significant publications – “the Red Book” – which provides essential guidance for valu-ers and is in the final stages of being published in Polish. In which areas do you see room for improvIn which areas do you see room for improvIn which areas do you see room for improvIn which areas do you see room for improve-e-e-e-ment?ment?ment?ment? Short answer but I think all the areas we have set as goals have room for improvement. How many RICS members are there in Poland? How many RICS members are there in Poland? How many RICS members are there in Poland? How many RICS members are there in Poland? Is the nIs the nIs the nIs the number growing fast?umber growing fast?umber growing fast?umber growing fast? We currently have over 260 members of which 13 have joined in the last three months. It is growing steadily but we will be paying a lot of attention to growth as the more members we have the more we all benefit. Getting value for your membership cost is always important. I believe this value is already there but one area for improvement is to communi-cate this better to our members and to keep improv-ing on it. In the short time I’ve been a member of RICS Polska board I’ve already seen that there is a lot more going on than I was previously aware of as


a regular member. We need to do a better job of communicating the benefits that membership of RICS brings.

LATEST LEASE DEALS IN BRIEF

Poleczki Business Park in Warsaw Image: JLL StryStryStryStryker ker ker ker has recently extended its lease of a total of approximately 2,500 sqm of office and warehouse space at Poleczki Business Park in Warsaw. The new agreement was signed for the period of six years, with JLL having represented the tenant in the negotiations process. The Poleczki Business Park complex is being developed by UBM and CA Immo in the Ursynów district of the Polish capital. When completed, it will comprise 15 buildings and offer a total of approximately 210,000 sqm of leasa-ble space. Reserved Reserved Reserved Reserved is going to take up more than 1,300 sqm of retail space at the Fabryka Wołomin shopping centre project which investor Park Handlowy Wołomin is currently developing in Wołomin near Warsaw. The scheme will comprise a shopping mall and a retail park, which will respectively offer 23,500 sqm and 6,500 sqm of leasable space, and is

scheduled to be completed in the fourth quarter of next year. CBRE is the exclusive leasing agent of the development.

COMING & GOING

Joanna IwanowskaJoanna IwanowskaJoanna IwanowskaJoanna Iwanowska

Joanna Iwanowska has recently joined the real es-tate recruitment consultancy Tara HR Consulting as an associate. She is responsible for new business development and recruiting projects for real estate clients from both the commercial and the residen-tial market. Iwanowska has a total of more than 13 years of local and international experience in the property market. Most recently she worked as a sales and marketing director at Eko-Park and as a sales director at UBM.

weekly newsletter # 035/ 17th November 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


Documents

PT Urban Issues No. 35