PT Urban Issues No. 024

No. 024 / 25th August 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

Newsletter Editor: Adam Zdrodowski

[email protected]

tel. +48 504 182 308

OFFICE BBI Development is getting ready to launch a new office project in Warsaw page 2 Skanska Property Poland is now developing the second phase of its Silesia Business Park scheme in Katowice page 3

RETAIL Dekada Realty is building the tenth Dekada-brand convenience shopping centre project in Poland page 3

RESIDENTIAL Dom Development has launched the first phase of its Klasyków II investment in the Polish capital page 3

SECOND HOMES A new condohotel will be developed within the Czarna Góra complex in Lower Silesia page 4

INTERVIEW Poland Today talks to Ilona Kowalska, acting president of the Military Property Agency page 4

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

COMING & GOING Agnieszka Ciupak, Grif-fin Group page 6

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

The sold assets include T-Mobile Office Park in Warsaw Photo: Ghelamco Poland

Ghelamco Poland finalizing major Ghelamco Poland finalizing major Ghelamco Poland finalizing major Ghelamco Poland finalizing major package office building salepackage office building salepackage office building salepackage office building sale Developer Ghelamco Poland has finalized the sale of a total of three completed office projects in Warsaw and Katowice to an affiliate of the global private investment firm Starwood Capital Group page 2

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INVESTMENT MARKET

Ghelamco finalizing Ghelamco finalizing Ghelamco finalizing Ghelamco finalizing major package office major package office major package office major package office building salebuilding salebuilding salebuilding sale

Developer Ghelamco Poland has finalized the sale of three existing office buildings in Warsaw and Ka-towice to an affiliate of the global private invest-ment firm Starwood Capital Group. The value of the transaction has not been revealed. However, the German bank Helaba has announced that it has provided Starwood with a long-term €136-million loan in support of the acquisition.

T-Mobile Office Park in Warsaw Image: Ghelamco Poland The three office buildings in question are T-Mobile Office Park and Łopuszańska Business Park in War-saw (respectively located in the Mokotów and Włochy districts and completed in 2013), and Ka-towice Business Point in downtown Katowice (completed in 2010). The buildings comprise a total of 78,000 sqm of leasable office space and are now

almost fully leased out to tenants including T-Mobile, Citibank, Allianz, Alior Bank, Tauron, PwC and Żywiec. Jeroen van der Toolen, managing director, CEE, at Ghelamco, said that this is the first time the compa-ny has sold three assets in one transaction. “Funds from the sale will be invested in new office, retail and residential projects,” he added. “The transac-tion highlights [our] expanding presence in Europe, as well as our ability to opportunistically invest in markets that we believe are poised to capitalize up-on a prolonged recovery across the region,” said Keegan Viscius, vice president at Starwood Capital Group.

OFFICE

BBI getting ready to BBI getting ready to BBI getting ready to BBI getting ready to launch new office launch new office launch new office launch new office project in Warsawproject in Warsawproject in Warsawproject in Warsaw

Warsaw Stock Exchange-listed developer BBI De-velopment is planning to launch construction on its Centrum Marszałkowska office and retail project in Warsaw at the beginning of next year. The company will soon start demolishing the D.H. Sezam retail building located at the intersection of ul. Marszałkowska and ul. Świętokrzyska in the down-town of the Polish capital where the planned scheme will be developed. The development, which BBI Development will de-velop in cooperation with the “Społem” Śródmieście cooperative, will comprise approxi-mately 12,000 sqm of office space and around 4,800 sqm of retail areas. Located at the intersection of

the two Warsaw subway lines, Centrum Marszałkowska will be the first commercial build-ing in Poland with direct access to a subway stop. The investment is scheduled to be completed in 2017. BBI Development is currently also planning anoth-er major office project in downtown Warsaw which will be located at the intersection of ul. E. Plater and ul. Nowogrodzka and developed in cooperation with the Archdiocese of Warsaw. Called Roma Tower, the scheme is expected to rise approximate-ly 170 metres tall and comprise around 55,000 sqm of office space. The development is scheduled for completion in 2017.

The scheme will be completed in 2017 Image: BBI Development Warsaw City Hall has recently presented a draft version of a new zoning plan covering the area in which Roma Tower will be located. The draft ver-sion of the zoning plan allows for the development of the planned skyscraper. “We hope that the ongo-ing administrative process will allow us to launch construction before the end of next year,” said Rafał Szczepański, vice president of the management board at BBI Development.


OFFICE

Second Second Second Second phase of Silesia phase of Silesia phase of Silesia phase of Silesia Business Park gets Business Park gets Business Park gets Business Park gets under constructionunder constructionunder constructionunder construction

The complex will deliver 46,000 sqm of GLA

Image: Skanska Property Poland

Developer Skanska Property Poland has recently launched construction on the second building with-in its four-building Silesia Business Park office pro-ject in Katowice. The building is scheduled to be completed at the turn of Q3 and Q4 next year. Con-struction on the first building within the scheme has been underway since November last year and should finish in the next few months. The building has already been commercialized in 65%, with ten-ants including PwC and a local unit of Skanska. The Silesia Business Park development is located on ul. Chorzowska, opposite the existing Silesia City Center shopping mall, and is the first investment of Skanska Property Poland in Katowice. The project, which has been designed by the Medusa Group ar-chitectural studio and is being built by Skanska, is

expected to comprise a total of 46,000 sqm of leas-able office space when fully developed. Part of the Skanska Group, Skanska Property Po-land has been operating since 1997 and is, apart from Katowice, present in five other markets in Po-land – Warsaw, Wrocław, Poznań, Łódź and Kraków. The company is currently developing or preparing a number of major office schemes across the country, including the Atrium 2 and Generation Park developments in the Wola district of the Polish capital.

RETAIL

Work on new DekadaWork on new DekadaWork on new DekadaWork on new Dekada----brand convenience brand convenience brand convenience brand convenience centre gets underwaycentre gets underwaycentre gets underwaycentre gets underway

Real estate investor Dekada Realty has launched construction on its Dekada Malbork convenience shopping centre project in Malbork in northern Po-land. The scheme is the tenth Dekada-branded in-vestment of the company. The two-floor Dekada Malbork development will comprise approximately 5,400 sqm of leasable space and house 20 stores. An underground parking lot with spaces for 100 cars will also be part of the project The scheme will be located between Al. Rodła and ul. Kościuszki, close to the railway and bus stations and the Old Town area of Malbork. According to the investor, 96,000 people live within the catch-ment area of the investment. Malbork is popular with Polish and foreign tourists and the proximity of the Dekada Malbork development to the famous Castle of the Teutonic Order should make it a popu-

lar shopping destination, said Aleksander Walczak, president of the management board at Dekada Real-ty. The Dekada Malbork project is currently leased out in more than 70%, to tenants including H&M, CCC, RTV Euro AGD and Rossmann, with BOIG Property Consulting responsible for the commercialization of the scheme. H&M, which has leased almost 1,700 sqm of space at Dekada Malbork, will be the largest tenant. Its store will be the first H&M store in the city, said Radosław Gadomski, commercial director at BOIG Property Consulting. Walczak said that Dekada Realty continues to look for new interesting sites for future projects. The lo-cations that the company takes into account include railway stations and centres of cities with popula-tions of less than 100,000. He added that the Dekada chain will ultimately comprise at least 20 convenience shopping centres. New facilities are currently planned in cities including Łowicz and Nysa, while the existing Dekada shopping centre in Skierniewice will be expanded, Walczak said.

RESIDENTIAL

Dom Development Dom Development Dom Development Dom Development expanding Klasyków expanding Klasyków expanding Klasyków expanding Klasyków project in Warsawproject in Warsawproject in Warsawproject in Warsaw

Warsaw Stock Exchange-listed developer Dom De-velopment has recently launched construction on and sales of apartments in the first phase of its Klasyków II residential project in the Polish capital. The scheme is located on ul. Krokwi in the Białołęka district of Warsaw and is being developed


on land neighbouring the already completed Klasyków I development which comprises 558 apartments. Dom Development plans to develop a total of six-teen buildings within the Klasyków II investment which has been designed by the HRA Architekci studio and will comprise a combined 435 housing units. The first phase of the Klasyków II project will deliver a total of 231 apartments in eight build-ings and 234 parking spaces in an underground parking lot. The phase is scheduled to be completed in the second quarter of 2016.

The first phase will comprise 231 housing units

Image: Dom Development

Dom Development, which sold more than 1,600 apartments last year, launched construction on a to-tal of nine residential projects in Warsaw and Wrocław, the two markets it is active in, in the first half of 2014. The company has been acquiring land for future schemes of late. Since the beginning of this year, the developer has announced the pur-chase of a number of sites for new developments in the Ochota, Mokotów and Praga Południe districts of Warsaw. In the near future, Dom Development is planning to launch construction on at least one new investment which will be located in the Ochota district of War-

saw. The company is going to spend 160 million zlo-ty on the purchase of new plots this year. “So far this year, we have already spent approximately 60 million zloty. We are mostly interested in sites in Warsaw,” said Jarosław Szanajca, president of the management board at Dom Development.

SECOND HOMES

Czarna Góra complex Czarna Góra complex Czarna Góra complex Czarna Góra complex in Lower Silesia to get in Lower Silesia to get in Lower Silesia to get in Lower Silesia to get a new condohotela new condohotela new condohotela new condohotel

Developer and investor Czarna Góra Apartamenty is planning to develop a new condohotel project within its Czarna Góra recreation complex in the Sudetes in Lower Silesia. Construction on the scheme is scheduled to launch later this year and finish in 2016. The four-storey development will comprise 142 turn-key standard apartments, priced from 8,900 zloty per sqm, as well as conference space and several recreation facilities including a swimming pool. Czarna Góra Apartamenty has already developed six apartment buildings with a total of approxi-mately 250 housing units within the Czarna Góra complex which is one of the main ski destinations in south-western Poland. Since 2008, the company has invested around 40 million zloty in the devel-opment and modernization of winter sports infra-structure at Czarna Góra and is now planning an-other ski resort in the area. According to Marlena Kosiura, an expert at InwestycjewKurortach.pl, an industry website de-voted to the second home market in Poland, second

homes can now be bought in more than 320 new in-vestments across the country. Approximately 7% of those investments are developments that were from the beginning planned as condohotels or apartment buildings in which the apartment owners can profit from renting their property. Condohotels are currently gaining in popularity as they are increasingly often being developed as all-year facilities with their own conference infrastruc-ture, which ensures stable profits for the individual investors, Kosiura said. She also pointed to a new trend consisting in condohotels being managed by well-known international brands. For instance, two Qualia Development-developed condohotels on the Baltic coast operate under the Golden Tulip brand.

The condohotel will deliver 142 apartments

Image: Czarna Góra Apartamenty

INTERVIEW

Investors buying more Investors buying more Investors buying more Investors buying more military property military property military property military property across Polandacross Polandacross Polandacross Poland

Poland Today talks to Ilona Kowalska, acting presi-dent of the Military Property Agency (Agencja


Mienia Wojskowego – AMW), about the current demand for building land in Poland and the plots which the Agency is going to put up for sale in the upcoming months. Poland Today: Poland Today: Poland Today: Poland Today: Property market eProperty market eProperty market eProperty market exxxxperts are talperts are talperts are talperts are talk-k-k-k-ing of a recovery in the building land market in ing of a recovery in the building land market in ing of a recovery in the building land market in ing of a recovery in the building land market in Poland. Is there alPoland. Is there alPoland. Is there alPoland. Is there also an iso an iso an iso an innnncreased demand for creased demand for creased demand for creased demand for the land offered for sale by the AMW?the land offered for sale by the AMW?the land offered for sale by the AMW?the land offered for sale by the AMW? Ilona Kowalska: Ilona Kowalska: Ilona Kowalska: Ilona Kowalska: Indeed, in recent years we could see a downturn in the real estate market, as well as difficulties related to the financing of investments. Banks had pretty strict policies with regard to the financing of investments valued at several million zloty and we could see that smaller plots were in highest demand. This mostly pertained to those plots whose bid prices stood at around one million zloty. However, this trend is now starting to change. We have recently started to sell plots val-ued at several or even more than ten million zloty – for example, in June, we successfully concluded the tender for the sale of land on ul. Waldorffa in War-saw which was offloaded for more than six million zloty. How many How many How many How many pieces of real estatepieces of real estatepieces of real estatepieces of real estate and for which and for which and for which and for which tttto-o-o-o-tal tal tal tal amount of money amount of money amount of money amount of money did the Mildid the Mildid the Mildid the Miliiiitary Property tary Property tary Property tary Property AgencyAgencyAgencyAgency manage to sell last year? Can you give manage to sell last year? Can you give manage to sell last year? Can you give manage to sell last year? Can you give examples of some of the largest transaexamples of some of the largest transaexamples of some of the largest transaexamples of some of the largest transacccctions tions tions tions closed in 2013?closed in 2013?closed in 2013?closed in 2013? Last year, the Military Property Agency sold 256 properties (or parts thereof) for a total of more than 108 million zloty. The largest transactions included the sale of the Twierdza Modlin fortifications near Warsaw for 17.85 million zloty (including a 50% discount given to the purchaser as the property is entered in the historic property register), the sale of two properties located on ul. Słowackiego in Gdańsk for 12.8 million zloty and 3.54 million zloty,

the sale of a property located on ul. Rydla in Kraków for 7.72 million zloty and the sale of part of a former military complex located on ul. Zwycięska in Wrocław for over 5.35 million zloty.

Poland Today talks to: Ilona Kowalska, acting president of the Military Property Agency How much did youHow much did youHow much did youHow much did you sell in H1 and what are thesell in H1 and what are thesell in H1 and what are thesell in H1 and what are the forecastforecastforecastforecastssss for the second half of thisfor the second half of thisfor the second half of thisfor the second half of this year?year?year?year? Since the beginning of the year, the Military Prop-erty Agency has organized more than 800 tenders. Those which were concluded successfully brought us revenues amounting to a total of over 53 million zloty. The transactions closed in the second quarter included the sale of properties in Gdańsk, Nowy Dwór Mazowiecki, Warsaw, Poznań, Legnica, Wrocław, Bydgoszcz, Brzeg and Świnoujście. This year, the Military Property Agency expects to see revenues from the sale of properties amounting to approximately 140 million zloty. At the moment,

our stock comprises 2,600 plots whose total area amounts to over 5,000 hectares, as well as more than 2,400 buildings with a total usable space of almost 1.1 million sqm. FoFoFoFor which kind of proper which kind of proper which kind of proper which kind of properrrrties ties ties ties offered by the offered by the offered by the offered by the Agency Agency Agency Agency is there the most dis there the most dis there the most dis there the most deeeemandmandmandmand???? It is hard to point to any particular pattern here. Undoubtedly, apart from the price, interest in a par-ticular property mostly depends on the location and development potential. One of the long-term effects of the crisis which, I hope, is now becoming a thing of the past, are the restrictions related to the financ-ing of investments. For a long time, not all compa-nies could afford to buy large and expensive proper-ties as they did not have a sufficient amount of their own funds. What paid off was the development of smaller and cheaper plots as it did not require large financial outlays and involved less investment risk. This worked in locations including Legnica where we started to sell small plots, carved out from a larger complex. In the case of large properties, what can be an incentive for the potential buyer is, apart from a zoning plan and an attractive location, the 50% discount for which the buyer is eligible if the property is entered in the historic property register. A perfect example of this category of properties is Twierdza Modlin which the Agency sold in August last year. WWWWho are the ho are the ho are the ho are the buyersbuyersbuyersbuyers? ? ? ? Is it just deveIs it just deveIs it just deveIs it just devellllopers or also opers or also opers or also opers or also individual investors?individual investors?individual investors?individual investors? This mostly depends on the location. In smaller cit-ies, our properties are mostly acquired by individual investors, local entrepreneurs and private individu-als looking for plots for single-family houses. In the case of large cities and logistics, warehouse and re-tail properties, the buyers are most often large de-velopers.


What are some of the most attractive propeWhat are some of the most attractive propeWhat are some of the most attractive propeWhat are some of the most attractive properrrrties ties ties ties currentlcurrentlcurrentlcurrently offered for sale by y offered for sale by y offered for sale by y offered for sale by the AMWthe AMWthe AMWthe AMW???? Properties with the biggest investment potential in-clude plots in downtown Wrocław, in the Kępa Mieszczańska area. It is a real gem in our stock and one of the best investment areas in Poland. Its as-sets are its very good location and transportation links with the other parts of the city, as well as the fact that the land is covered by a zoning plan which gives potential investors many options to realize their business plans. We hope that in the case of the Kępa Mieszczańska property the domino effect will kick in and after finding a buyer for one or two plots, the sale of the other plots will just be a matter of time. Another attractive property is located on ul. Rakowicka in Kraków. These are plots located in the Śródmieście district, in the area where the Nowe Miasto urban planning project is being real-ized. The former military airfield at Nowe Miasto nad Pilicą, along with the adjacent plots, also offer many development opportunities – a total of 500 hectares of land, valued at 20 million zloty, is wait-ing for a buyer there.

ILONA KOWALSKA Ilona Kowalska was appointed as acting president of the Military Property Agency in April this year. A grad-uate of the law and administration department of the University of Silesia and an MBA program at the War-saw School of Economics, she previously worked at, among other places, the Ministry of Finance.

LATEST LEASE DEALS IN BRIEF

LeasePlan Fleet MaLeasePlan Fleet MaLeasePlan Fleet MaLeasePlan Fleet Mannnnagagagageeeement Polska ment Polska ment Polska ment Polska has leased around 1,960 sqm of office space at the NC3 office project in Warsaw. The company is going to move

into its new premises in the first quarter of next year. CBRE advised the tenant in the negotiations process. The NC3 office scheme is being developed by ECI in the Mokotów district of the Polish capital and is the sixth investment of the company in that district.

NC3 in Warsaw Image: CBRE

Power transmission belts producer Mitsuboshi PMitsuboshi PMitsuboshi PMitsuboshi Po-o-o-o-land land land land has extended its agreement for the lease of 1,500 sqm of space at the MLP Pruszków I logistics park near Warsaw which belongs to MLP Group. MLP Pruszków I is the first logistics park to have been developed by MLP Group. The park now has approximately 50 tenants and has a total target warehouse and manufacturing area of 167,000 sqm. The Cosmedica Cosmedica Cosmedica Cosmedica drugstore chain has leased approx-imately 200 sqm at each of the three convenience shopping centre projects which developer Ghelamco Poland is now planning in and around Warsaw. The schemes will be located in the Wilanów district of Warsaw (Plac Vogla), and in

Piaseczno (Pasaż Tukanów) and Łomianki (Prochownia Łomianki), both lying just outside of the Polish capital.

COMING & GOING

Agnieszka CiupakAgnieszka CiupakAgnieszka CiupakAgnieszka Ciupak

Agnieszka Ciupak has recently been appointed as the head of office leasing at real estate investor Grif-fin Group. She will manage the lease of office space in assets including Hala Koszyki, Prima Court and Nordic Park in Warsaw, and Centrum Biurowe Lubicz in Kraków. A graduate of several universi-ties including the Warsaw School of Economics, Ciupak has been working in the property market since 1998. She previously worked for developers Globe Trade Centre and UBM Polska.

weekly newsletter # 024/ 25th August 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


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PT Urban Issues No. 024