pt urban issues no. 022

No. 022 / 21st July 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

Newsletter Editor: Adam Zdrodowski

[email protected]

tel. +48 504 182 308

RETAIL Inter IKEA Centre Group Poland has started expanding its Wola Park shopping centre in Warsaw page 2 Construction on a new outlet centre project in Białystok is set to launch next month page 3

OFFICE Developer Torus has laid the cornerstone for the second phase of the Alchemia office scheme in Gdańsk page 3

PUBLIC SPACE Ghelamco Poland has shown the design of a new public square it will deliver in Warsaw page 4

RESIDENTIAL Developer ICON Real Estate will launch a new project in Warsaw later this year page 4

INTERVIEW Poland Today talks to Dariusz Kacprzyk, president of the management board at Bank Gospodarstwa Krajowego page 5

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

COMING & GOING Paweł Strzemecki, DTZ page 6

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

Rondo 1 has recently been sold for approximately €300 million Photo: CBRE

PPPProperty iroperty iroperty iroperty investment nvestment nvestment nvestment volume in Poland volume in Poland volume in Poland volume in Poland expected to amount toexpected to amount toexpected to amount toexpected to amount to €€€€4bn this year4bn this year4bn this year4bn this year This year will be very strong for the commercial property in-vestment market in Poland, with the total transactions volume expected to much exceed the volume recorded last year page 2

weekly newsletter # 022 / 21st July 2014 / page 2

INVESTMENT MARKET

Investment volume in Investment volume in Investment volume in Investment volume in Poland expected to hit Poland expected to hit Poland expected to hit Poland expected to hit €4bn this year€4bn this year€4bn this year€4bn this year

Poland remains the leading investment market in Central and Eastern Europe, with the commercial property investment volume in the country ex-pected to hit around €4 billion this year, according to a recent report by JLL. In the first half of the year, 28 investment transactions, valued at a total of approximately €1.43 billion, were closed in Poland, which accounted for 50% of the total investment volume in the region (around €2.87 billion), the study said. The €1.43 billion transacted in Poland in H1 was the best result since 2007 and it marked a 40% increase upon the investment volume recorded in the coun-try in the same period of last year. At the beginning of this year, JLL predicted that the 2014 commer-cial property investment volume in Poland would be similar to that from last year (more than €3.4 bil-lion) and would amount to approximately €3 bil-lion. Tomasz Puch, head of office and industrial invest-ment at JLL, said that the company has upgraded the forecast because a number of new large transac-tions which had not been taken into account have appeared in recent months. This mostly pertains to the office and warehouse sectors. Taking into ac-count the current investor activity and the ongoing transactions one can expect that this year will be better than last year in terms of the total investment volume, Puch said.

The Rondo 1 office tower in downtown Warsaw Image: CBRE

The office, retail and warehouse property sectors respectively accounted for transactions valued at €752 million, €368 million and €313 million in the first half of this year. So far this year, no deals in-volving mixed-use and hotel property have been recorded in Poland. The largest transaction closed in H1 2014 was the sale by BlackRock of the Rondo 1 office skyscraper in downtown Warsaw to Deutsche Asset & Wealth Management for around €300 million.

RETAIL

Expansion of Wola Expansion of Wola Expansion of Wola Expansion of Wola Park shopping mall in Park shopping mall in Park shopping mall in Park shopping mall in Warsaw gets underwayWarsaw gets underwayWarsaw gets underwayWarsaw gets underway

Real estate developer and investor Inter IKEA Cen-tre Group Poland has launched the expansion of the

Wola Park shopping centre in Warsaw which it ac-quired from an AEW Europe-managed fund in Oc-tober last year. The area of the mall, which is locat-ed on ul. Górczewska in the Wola district of the Polish capital, will be expanded by 17,500 sqm to a total of 77,500 sqm, thus making Wola Park the se-cond largest shopping centre in Warsaw. The new part of the facility will be developed on the site of an existing parking lot. Construction is scheduled to finish in the autumn of next year, said Jacek Lipiński, a project manager at Inter IKEA Centre Group Poland. An over 10,000-sqm Castorama DIY store will be the anchor tenant of the new part of Wola Park. The shopping centre will also have 20 new fashion retailers and its food court will get a number of new restaurants and cafes.

The mall will grow by 17,500 sqm

Image: Inter IKEA Centre Group Poland

Last year, shopping centre expansions accounted for approximately 23% of the new retail supply in Poland, with Centrum Riviera in Gdynia having been the largest project of this kind, said Agnieszka Luścińska, an analyst at Colliers International. At


the moment, expansions account for around 20% of the retail space under construction, with the expan-sion of Park Handlowy Bielany in Wrocław (35,000 sqm of GLA) and Galeria Sudecka in Jelenia Góra the most spectacular examples, Luścińska said. Part of the IKEA group, Inter IKEA Centre Group Poland currently owns a total of eight shopping centres across Poland – in Gdańsk, Łódź, Poznań, Wrocław, Katowice and Warsaw (three facilities). At the moment, the company is involved in the ex-pansion of the Park Handlowy Bielany shopping centre in Wrocław and the development of a new mall in Lublin in south-eastern Poland.

RETAIL

Construction on Outlet Construction on Outlet Construction on Outlet Construction on Outlet Białystok scheme to Białystok scheme to Białystok scheme to Białystok scheme to launch next monthlaunch next monthlaunch next monthlaunch next month

Developer and investor ADV Por Property Invest-ment will next month commence construction on the first two phases of its planned Outlet Białystok retail project in Białystok in north-eastern Poland. The whole Outlet Białystok scheme is expected to feature three phases. It will comprise a total of more than 13,000 sqm of leasable space, housing approximately 100 tenants, when fully developed. The development has already been commercialized in over 60%, with CBRE acting, in cooperation with ADV Por Property Investment, as the exclusive leasing agent. It is scheduled to open for business in spring next year, a few months later than originally planned. Ewa Spychalska, property management di-rector at ADV Por Property Investment, explained

that the company will this year deliver a similar outlet centre investment in Lublin and some of the targeted tenants would find it difficult to open their stores in both locations in one year. The outlet centre market in Poland started to de-velop in 2002 when the first such facility – Factory Outlet – opened for business in Warsaw, said Agata Czarnecka, Associate Director – Consultancy &Research, at CBRE. According to CBRE data, the total leasable space in existing outlet centres in Po-land amounted to 158,020 sqm in the second quar-ter of this year, which accounted for approximately 2% of the total leasable space in modern shopping centres in the country. There are currently ten outlet centre facilities in eight large cities across Poland. Warsaw boasts of three such centres, while Sosnowiec, Gdańsk, Wrocław, Szczecin, Łódź, Kraków and Poznań each have one outlet centre, Czarnecka said. She added that Białystok and Lublin are the two confirmed fu-ture locations. Outlet centre projects could also be developed in locations including Toruń/Bydgoszcz and Rzeszów but those schemes are still at an early planning stage, Czarnecka said.

The project will be completed in spring next year Image: CBRE

OFFICE

Cornerstone laiCornerstone laiCornerstone laiCornerstone laid for d for d for d for second phase of second phase of second phase of second phase of Alchemia in GdańskAlchemia in GdańskAlchemia in GdańskAlchemia in Gdańsk

The whole scheme will feature four phases Image: Torus

Developer Torus earlier this month held a corner-stone-laying ceremony at the construction site of the second phase of its Alchemia office project in Gdańsk. The scheme is scheduled to be completed in the last quarter of next year. The second phase of Alchemia will deliver almost 21,000 sqm of office space and more than 1,600 sqm of retail and service areas. Apart from office tenants, it is expected to house a large medical centre and a kindergarten. The first phase of the development has delivered 16,700 sqm of office space, as well as a 4,600-sqm recreation and sports centre featuring facilities in-cluding swimming pools, a fitness club and a gym. The whole investment, which is located on Al. Grunwaldzka in the Oliwa district of Gdańsk and


will be developed in four phases, is expected to comprise a total of more than 80,000 sqm of space. Sławomir Gajewski, president of the management board at Torus, said that the company is now admit-tedly focusing on the second phase of Alchemia, but it is already also planning the third and the fourth phase of the development. Meanwhile, the develop-er is planning a smaller office investment in Gdańsk which will be located closer to the downtown of the city. Torus is also going to develop a logistic-industrial scheme in Tri-city, Gajewski said.

PUBLIC SPACE

Ghelamco Ghelamco Ghelamco Ghelamco Poland Poland Poland Poland unveils design of major unveils design of major unveils design of major unveils design of major new square in Warsawnew square in Warsawnew square in Warsawnew square in Warsaw

Developer Ghelamco Poland has revealed the archi-tectural design of Plac Europejski (European Square) – a major new public area which the com-pany will deliver along with its flagship Warsaw Spire office project in the Polish capital. Designed by the renowned Wirtz International Landscape Architects studio, the granite-covered square will feature extensive green and water areas, as well as outdoor furniture and an amphitheater. Ghelamco Poland hopes the numerous restaurants, bars and cafes which will be located on the ground floors of the Warsaw Spire complex buildings, will help make the square attractive not only for the of-fice workers, but also for the inhabitants of War-saw. Construction on the new square has already been launched, with the square expected to take its final shape when the Warsaw Spire complex is fin-

ished next year, said Jarosław Zagórski, commer-cial and business development director at Ghelamco Poland.

The new square will be ready next year Image: Ghelamco Poland

RESIDENTIAL

ICON Real Estate ICON Real Estate ICON Real Estate ICON Real Estate about to launch new about to launch new about to launch new about to launch new project in Warsawproject in Warsawproject in Warsawproject in Warsaw

Developer ICON Real Estate is planning to launch construction on Villa Onyx – its latest residential project in Warsaw – in autumn this year. The com-pany is currently in the process of selecting a gen-eral contractor for the scheme. The Villa Onyx de-velopment has been designed by the Kikowski Architekci architectural studio and has already got

a building permit. It is scheduled to be completed in the spring of 2016. The investment will be located on ul. Międzynarodowa in the prestigious Saska Kępa neighbourhood of the Praga Południe district of the Polish capital and will deliver 27 upper-standard apartments. The prices of the housing units in the project range from around 9,500 zloty per sqm to approximately 12,500 zloty per sqm, said Emanuel Grykin, vice president of the management board at ICON Real Estate. The company has already sold 20% of the homes in the scheme. Active both in Warsaw and the regional cities in Po-land for almost six years now, Warsaw-based ICON Real Estate specializes in the revitalization of his-toric tenement houses and the development of bou-tique apartment buildings. The company has re-cently delivered the Piano House luxury residential development located in the Powiśle neighbourhood of Warsaw and is now preparing to launch con-struction on investments including a new housing project in the Mokotów district of the Polish capi-tal.

The project will deliver 27 apartments

Image: ICON Real Estate


INTERVIEW

BGBGBGBGK fund planning to K fund planning to K fund planning to K fund planning to acquire up to 20,000 acquire up to 20,000 acquire up to 20,000 acquire up to 20,000 apartments in Polandapartments in Polandapartments in Polandapartments in Poland

Poland Today talks to Dariusz Kacprzyk, manage-ment board president at state-owned Bank Gospodarstwa Krajowego (BGK), about the nascent Housing Rental Fund (Fundusz Mieszkań na Wynajem – FMnW) initiative of the bank. Poland Today: Poland Today: Poland Today: Poland Today: BGK wants to be very active in the BGK wants to be very active in the BGK wants to be very active in the BGK wants to be very active in the houhouhouhoussssing rental market in Poland in the upcoming ing rental market in Poland in the upcoming ing rental market in Poland in the upcoming ing rental market in Poland in the upcoming years. How many apartments will the Fund ayears. How many apartments will the Fund ayears. How many apartments will the Fund ayears. How many apartments will the Fund ac-c-c-c-quire and which amount of money will it iquire and which amount of money will it iquire and which amount of money will it iquire and which amount of money will it innnnvest?vest?vest?vest? Dariusz Kacprzyk: Dariusz Kacprzyk: Dariusz Kacprzyk: Dariusz Kacprzyk: Fundusz Mieszkań na Wynajem is an initiative of BGK whose goal will be to boost the development of the housing rental market – we want to show other large investors that this business can be profitable in Poland and that it can be done on a large scale. We can already see in-terest on the part of foreign investment funds but someone has to make the first move. The 5bn zloty that we are going to expend will leave its imprint on the Polish economy. We expect that the creation of a stock of approximately 20,000 apartments will al-so help strengthen the job market by enabling oc-cupational mobility. Through these actions, we ful-fill our mission which calls for supporting the social and economic development of Poland. The Fund will be investing over the next few years. This year alone, we want to invest several hundred million zloty. The biggest sums will likely be invested in the second and in the third year of the Fund’s opera-tion.

In which locations and in which types of aparIn which locations and in which types of aparIn which locations and in which types of aparIn which locations and in which types of apart-t-t-t-ments are you interested?ments are you interested?ments are you interested?ments are you interested? We have done market research which has shown that the housing rental market is the most devel-oped in several of the largest cities and agglomera-tions in Poland: in Warsaw, Wrocław, Tri-city, Poznań and Kraków. The analysis also shows that there is the most demand for apartments sized from 50 sqm to 60 sqm – such housing units will domi-nate in our offer.

Poland Today talks to: Dariusz Kacprzyk, president of the management board at Bank Gospodarstwa Krajowego Are you planning to only acquire whole builAre you planning to only acquire whole builAre you planning to only acquire whole builAre you planning to only acquire whole build-d-d-d-ings, or wilings, or wilings, or wilings, or will you also be buying single units in l you also be buying single units in l you also be buying single units in l you also be buying single units in particular buildings?particular buildings?particular buildings?particular buildings? The investment strategy of the Fund calls for the purchase of whole buildings, or separate parts thereof. We are not planning to buy single apart-ments because managing them would be too costly. I would like to stress that if developers’ offers do

not meet our requirements, we will build apart-ments on our own. We are planning to build a land portfolio. How do you want to select the develoHow do you want to select the develoHow do you want to select the develoHow do you want to select the developpppers with ers with ers with ers with whom you will cooperate? Are developers showhom you will cooperate? Are developers showhom you will cooperate? Are developers showhom you will cooperate? Are developers show-w-w-w-ing mucing mucing mucing much interest in the Fund?h interest in the Fund?h interest in the Fund?h interest in the Fund? Every project that is submitted to us goes through due diligence. We verify the compatibility of a par-ticular project with our investment strategy because the FMnW operates on market principles and is supposed to generate profit. We are the first entity in Poland that wants to invest on such a big scale and so far we have seen a huge amount of interest on the part of developers. Could housing rental bCould housing rental bCould housing rental bCould housing rental beeeecome a viable alternative come a viable alternative come a viable alternative come a viable alternative to home purchases in Poland? Poles have rather to home purchases in Poland? Poles have rather to home purchases in Poland? Poles have rather to home purchases in Poland? Poles have rather been attbeen attbeen attbeen attached to the concept of home ownership, ached to the concept of home ownership, ached to the concept of home ownership, ached to the concept of home ownership, even if that involves taking out a big bank loan…even if that involves taking out a big bank loan…even if that involves taking out a big bank loan…even if that involves taking out a big bank loan… There is a shortage of apartments in Poland – ac-cording to various estimates, from 700,000 to even 1.5 million apartments are missing in the country. Meanwhile, recent research shows that we, along with the French and the British, are one of the most occupationally mobile nations. I believe that the FMnW, as a large, credible and stable entity, offer-ing apartments in various standards and locations, can contribute to the increasing of the attractive-ness of housing rental, compared to home owner-ship.

DARIUSZ KACPRZYK Dariusz Kacprzyk has been working in the banking sector for more than 20 years now. Before joining BGK, he worked for banks including BRE Bank, Bank Pekao, Bank BPH and PKO Bank Polski.


LATEST LEASE DEALS IN BRIEF

Plac Unii in Warsaw Image: Advanced Public Relations

HR firm Work Service Work Service Work Service Work Service has leased 2,100 sqm of of-fice space at the Plac Unii mixed-use complex in Warsaw. The tenant is expected to move into its new premises in December this year. Developed by BBI Development and Liebrecht & wooD, the Plac Unii complex was opened for business in October last year and comprises 41,300 sqm of office space which is leased to tenants including companies from the ING Group.

Galeria Sudecka in Jelenia Góra Image: Echo Investment

A Fabryka Formy Fabryka Formy Fabryka Formy Fabryka Formy fitness club is set to open at the Galeria Sudecka shopping centre which Echo In-vestment is now developing in Jelenia Góra in Lower Silesia. The tenant will take up over 1,300 sqm of retail space at the mall. The Galeria Sudecka shopping centre will feature a retail area of approx-imately 45,000 sqm. The mall, which is currently leased out in around 70%, will house 100 stores, res-taurants and points of services. British sporting goods retailer SportsDirect.comSportsDirect.comSportsDirect.comSportsDirect.com has recently leased 1,550 sqm of space at the Supersam retail project which investor Griffin Group is currently developing in Katowice in Sile-sia. Other tenants at the scheme, which is scheduled for delivery in the autumn of next year, include Centrum Medyczne WellMed, Fitness Pure Jatomi, an Aldi supermarket, Rossmann and Empik.

Supersam in Katowice Image: Griffin Group

Logistics company ET Logistik ET Logistik ET Logistik ET Logistik has extended its lease of nearly 4,000 sqm of space at the MLP Pruszków I logistics park near Warsaw which is operated by warehouse space developer MLP Group. The MLP Pruszków I park has a total target warehouse and manufacturing space of 167,000 sqm, developed over an area of 43 hectares. Ap-

proximately 50 tenants currently lease space at the park.

COMING & GOING

Paweł StrzemeckiPaweł StrzemeckiPaweł StrzemeckiPaweł Strzemecki

Paweł Strzemecki has recently joined DTZ as a sen-ior consultant in the Office Agency – Tenant Repre-sentation department. He is responsible for advis-ing tenants, negotiating deals and preparing anal-yses. Strzemecki holds a number of degrees from the Warsaw School of Economics and the Universi-ty of Warsaw. Before joining DTZ, he worked as a financial advisor at Ernst & Young.

weekly newsletter # 022/ 21st 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


(sqm)

Warsaw Konstruktorska

Business Center HB Reavis 48,300

Warsaw Miasteczko Orange Bouygues Immobilier 43,700

Warsaw Plac Unii BBI Development

/Liebrecht & wooD 41,300

Warsaw Marynarska 12 Ghelamco 40,000

Wrocław Sky Tower LC Corp 28,100


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


(sqm)

Gliwice Europa Centralna Helical Poland 67,000

Kraków Galeria Bronowice Immochan 60,000

Poznań Poznań City Center TriGranit 58,000

Gdynia

Centrum Riviera

(Wzgórze

– extension)

Mayland Real Estate 70,500

Katowice Galeria Katowice

Meyer Bergman

European Retail

Partners/ Neinver

42,000


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

Sector

Project

Value

(EUR mil-

lion)

Seller

Buyer

Retail Silesia City

Center

412 Immofinanz Allianz, ECE

Retail Galeria

Kazimierz 180

Globe Trade

Center,

Aventus

Invesco RE

Retail Galeria Domini-

kańska 151.7 ECE

Atrium

European Real

Estate

Office New City

127 ECI

Hines Global

REIT

Office Mokotów Nova

121 Ghelamco

Tristan Capital

Partners

Office Senator

120 Ghelamco

Union

Investment

In-

dustrial

H&M ware-

house

64 Invesco RE W.P. Carey

Indus-

trial Żerań Park II 43.2

Area Property

Parners,

Apollo Rida

Poland

SEGRO


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

Location Tenant Area(sqm) Project

Warsaw Polkomtel 22,680 Konstruktorska 4

Warsaw Getin Holding 18,850 Wola Center

Warsaw Urząd Rejestracji Leków 13,000 Adgar Park West

Warsaw Bank Zachodni

WBK 11,800 Atrium 1

Wrocław Getin Holding 11,700 Sky Tower


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

20

30

40

50

60

70

80

90

ŁódźWrocław

Tri-citySzczecin

PoznańKraków

Warsaw (out of town)Silesia

Warsaw (city centre)

Source: Cushman & Wakefield

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

Source: Cushman & Wakefield

10 15 20

25

Gdańsk

Szczecin

Katowice

Poznań

Kraków

Wrocław

Warsaw (non-central)

Warsaw (CBD)

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

Location Tenant Area(sqm) Project

Wrocław Amazon 123,500 Goodman Wrocław South

Logistic Center

Poznań Amazon 100,653 Panattoni Poznań

Wrocław Amazon 100,653 Panattoni Wrocław

Poznań supermarket

chain 82,385 -

Central Po-

land Castorama 49,961 Panattoni Park Stryków


pt urban issues no. 022

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