PT Urban Issues No. 34

No. 034 / 03rd November 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

Newsletter Editor: Adam Zdrodowski

[email protected]

tel. +48 504 182 308

OFFICE Vastint Poland has launched construction on its Business Garden Wro-cław scheme page 2 The Renaissance Plaza office building in Warsaw is in for refurbishment page 3

RESIDENTIAL PHN and mLocum will jontly develop a residen-tial project in Gdynia page 3 Budimex Nieruchomości has launched a new hous-ing scheme in Warsaw page 4

LOGISTICS MLP Group has announced three new built-to-suit projects in Poland page 4

INTERVIEW GRI talks to Martin Schlichting, vice president and head of international clients and cross border finance, at Erste Group Immorent page 5

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

COMING & GOING Dorota Chomuntowska, Cushman & Wakefield page 6

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

The scheme will be located in the Wilanów district of the Polish capital Photo: Morelia Investments

Morelia Investments to deliverMorelia Investments to deliverMorelia Investments to deliverMorelia Investments to deliver a new a new a new a new shopping centre in Warsaw shopping centre in Warsaw shopping centre in Warsaw shopping centre in Warsaw in 2016in 2016in 2016in 2016 Morelia Investments is planning a new shopping centre project in Warsaw. The scheme will comprise 29,000 sqm of leasable space and will be completed by the end of 2016. 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 # 034 / 03rd November 2014 / page 2

RETAIL

Warsaw set to get a Warsaw set to get a Warsaw set to get a Warsaw set to get a new shopping centre in new shopping centre in new shopping centre in new shopping centre in 2016201620162016

Morelia Investments is planning a new shopping centre project in southern Warsaw. The scheme will be located in the Miasteczko Wilanów neigh-bourhood of the Wilanów district, near the planned junction of ul. Przyczółkowa and the southern ring road of the Polish capital. Called Wilanów Park, the development will comprise approximately 29,000 sqm of retail space and house around 100 stores and points of services. The investment will be anchored by an Auchan hypermarket.

The project will deliver 29,000 sqm of retail space Image: Morelia Investments Auchan Polska will be a long-term tenant of Wilanów Park and could become the owner of the hypermarket in the future. It will not be the owner of the shopping mall, said Małgorzata Lenarczyk-Brachet, president of the management board at Mo-relia Investments. She pointed out that such a co-operation model is often used by developers in Po-

land. For example, Auchan owns the hypermarket in the Wola Park shopping centre in Warsaw, while the mall belongs to another investor, Lenarczyk-Brachet said.

GTC is also planning a shopping mall in Wilanów Image: Globe Trade Centre Morelia Investments is going to turn three hectares of land lying adjacent to the planned project into green and recreation areas. The company also plans to improve the existing roads infrastructure in the area. The total value of the Wilanów Park scheme is estimated at approximately €65 million. Morelia Investments expects that the planned development will be completed towards the end of 2016. The Wilanów Park investment is not the only new shopping centre project that will be developed in Miasteczko Wilanów in the upcoming years, with Warsaw Stock Exchange-listed Globe Trade Centre (GTC) also planning a major mall in the neighbour-hood. Called Galeria Wilanów, that scheme is ex-pected to comprise more than 61,000 sqm of leasa-ble retail space and house approximately 250 stores and points of services. GTC is now in the process of obtaining the necessary administrative permits for the planned development. Asked whether there is room for two major shop-ping centres in the Miasteczko Wilanów area,

Lenarczyk-Brachet said that Morelia Investments is focusing on its own scheme and does not doubt in its success. “We are convinced that we will manage to meet the expectations of buyers and tenants,” Lenarczyk-Brachet said. The project has been well received by the authorities of the Wilanów district, she added.

OFFICE

Vastint Vastint Vastint Vastint launching launching launching launching Business Garden Business Garden Business Garden Business Garden Wrocław schemeWrocław schemeWrocław schemeWrocław scheme

The project will comprise 110,000 sqm of GLA Image: Vastint Poland Developer Vastint Poland has recently launched construction on its Business Garden Wrocław office project in Wrocław. The first phase of the scheme is scheduled to be completed towards the end of 2016. Within the first phase of the Business Garden Wrocław development, three office buildings com-prising a total of approximately 37,000 sqm of leas-able space, along with accompanying infrastructure, will be delivered.


The Business Garden Wrocław investment has been designed by the APA Wojciechowski architectural studio, with the general contractor expected to be selected before the end of this year. The project, which is located on ul. Legnicka, close to the Mag-nolia shopping centre, is expected to comprise eight office buildings and a hotel building with a com-bined 110,000 sqm of leasable space, when fully de-veloped.

Business Garden Warszawa will soon be expanded Image: Vastint Poland Vastint Poland (formerly known as SwedeCenter) is part of Inter IKEA Property Division and has been active in Poland since 1992. The Business Garden Wrocław scheme is the first office development of the company in Wrocław and its third Business Garden-branded investment. Vasting Poland is planning to launch construction on the second phase of Business Garden Warszawa in the upcom-ing weeks. Early next year, the first phase of Busi-ness Garden Poznań is scheduled to be completed, said Ewa Łydkowska, marketing manager at the company. With an existing office stock of 555,900 sqm, Wrocław is the third largest and one of the fastest growing office markets in Poland. In the last five

years, 32 office buildings were completed in the city and the total stock increased by 59%, according to JLL data. A total of almost 125,000 sqm of office space is currently under construction in Wrocław, with the bulk of the new supply scheduled to be completed by the end of next year, a recent JLL re-port said.

OFFICE

Renaissance Plaza Renaissance Plaza Renaissance Plaza Renaissance Plaza building in Warsaw in building in Warsaw in building in Warsaw in building in Warsaw in for refurbishmentfor refurbishmentfor refurbishmentfor refurbishment

Warsaw-based asset manager MF Capital has agreed with German fund manager Corpus Sireo to take over the asset management of the Renaissance Plaza office building in the Polish capital. The scope of the assignment of MF Capital includes the re-positioning, refurbishment, re-commercialization and sale of the building in the future, said Jan Schwarz, managing director at the company. The project is currently at a very early stage of preparations and more details pertaining to the planned refurbishment should be known early next year. At the moment, Renaissance Plaza is fully leased out to telecom operator Orange, Schwarz said. The building is located in the Wola district of Warsaw, not far the new Rondo Daszyńskiego sub-way stop which is expected to be delivered later this year. This is a location that is set to see further development in the upcoming years, Schwarz pointed out. The Wola district of Warsaw has recently become very popular with office developers, with its Rondo

Daszyńskiego area expected to see the development of a number of new office towers in the near future. Ghelamco Poland, for one, is already developing its flagship Warsaw Spire project there, while Skanska Property Poland and Karimpol, among others, are planning to launch construction on major new of-fice schemes in the area within the next few months.

RESIDENTIAL

PHN, mLocum PHN, mLocum PHN, mLocum PHN, mLocum to to to to jointly build Gdynia jointly build Gdynia jointly build Gdynia jointly build Gdynia apartmentsapartmentsapartmentsapartments

A preliminary vision for the Molo Rybackie project Image: PHN Polski Holding Nieruchomości (PHN) subsidiary Dalmor and developer mLocum have entered into a joint-venture agreement regarding the development of a new residential project in Gdynia. The scheme will be located within the Molo Rybackie water-front area of the city which is owned by Dalmor. A


zoning plan envisions the development of a total of around 70,000 sqm of gross leasable commercial space and approximately 120,000 sqm of residential areas. The first phase of the development is expected to comprise six residential buildings and accompany-ing infrastructure, with the apartment sales sched-uled to launch in the second quarter of 2016. “The project will be developed in one of the best loca-tions on the Polish coast,” said Krzysztof Rychlicki, management board president and general director at Dalmor. mLocum board president Krzysztof Suskiewicz said the final design of scheme is yet to be prepared. Warsaw Stock Exchange-listed, state majority-owned PHN is one of the largest real estate compa-nies in Poland, in terms of the size of its portfolio. It owns 144 properties and around 700 hectares of building land across the country, with the ongoing projects including Domaniewska Office Hub in Warsaw. Formerly known as BRE.locum, mLocum is part of the mBank group and is active in the resi-dential markets of Kraków, Łódź, Wrocław, War-saw, Poznań and Tri-city. The company has to date developed a total of more than 4,100 apartments in 33 investments.

RESIDENTIAL

Budimex launching Budimex launching Budimex launching Budimex launching new renew renew renew residential project sidential project sidential project sidential project in Warsawin Warsawin Warsawin Warsaw

Developer Budimex Nieruchomości, part of the largest construction holding in Poland, Budimex,

has launched sales of apartments in its planned Zielony Marysin multi-family residential project in Warsaw. The scheme will be located on ul. Korkowa in the Wawer district of the Polish capital and will comprise 138 housing units. The develop-ment is scheduled to be completed in the second quarter of 2016.

The scheme is located in the eastern Wawer district Image: Budimex Nieruchomości Budimex Nieruchomości is now active in the resi-dential markets of Warsaw, Kraków and Poznań. According to its website, the company is currently also looking for land for multi-family residential in-vestments in Tri-city. In Warsaw, Budimex Nieruchomości is also selling apartments in pro-jects located in the Bemowo (Osiedle pod Słońcem), Mokotów (Osiedle Wiślany Mokotów) and Praga Południe (Osiedle Gocławska) districts. A favourable situation in the housing market is now enabling Budimex Nieruchomości to launch con-struction on new residential projects, said Andrzej Miś from the press office of the company. In 2014, Budimex Nieruchomości hopes to reach a pre-sales level of approximately 1,500 apartments, which will be possible thanks to the plans to launch seven new schemes with a total of around 1,600 housing units in the second half of the year, Miś said.

LOGISTICS

MLP announces threeMLP announces threeMLP announces threeMLP announces three new builtnew builtnew builtnew built----totototo----suit suit suit suit investmentsinvestmentsinvestmentsinvestments in Polandin Polandin Polandin Poland

MLP Group is going to develop a total of approxi-mately 120,800 sqm of warehouse and office space in three built-to-suit schemes for retail chains Mer-lin.pl, Małpka Express and Dyskont Czerwona Torebka within the next four years. This is a record project for MLP Group which will allow the com-pany to significantly increase the scale of its opera-tions, said Radosław Krochta, general director and vice president of the management board at MLP Group. The facilities for the FMCG sector companies Małpka Express and Dyskont Czerwona Torebka will be developed within a new logistics park which will be called MLP Poznań Zachód and located in the Poznań area. The park will be sitting on approx-imately 20 hectares of land. The new facilities will comprise around 25,500 sqm and approximately 53,800 sqm of space are respectively scheduled to be completed in December 2015 and December 2016. The facility for the e-commerce sector company Merlin.pl will be developed within the existing MLP Pruszków II logistics park which is located in the Warsaw area and is currently being expanded. That facility will comprise approximately 41,500 sqm of space and is scheduled to be completed in the third quarter of 2018 at the latest. All three lease agreements have been signed for the period of 15 years.


MLP Group is one of the largest warehouse space developers in Poland. The portfolio of the company currently comprises five logistics parks across the country – MLP Pruszków I, MLP Pruszków II, MLP Tychy, MLP Poznań and MLP Bieruń. Earlier this year, MLP Group finalized the acquisition of a piece of building land on which a new logistics park called MLP Lublin will be developed. The park is expected to offer around 55,000 sqm of leasable space.

INTERVIEW

The increasing lending The increasing lending The increasing lending The increasing lending appetite in Central and appetite in Central and appetite in Central and appetite in Central and Eastern Europe regionEastern Europe regionEastern Europe regionEastern Europe region

Ahead of the upcoming CEE GRI 2014 real estate investment meeting in Warsaw, of which Poland Today is a media partner, we publish an interview that GRI has conducted with Martin Schlichting, vice president and head of international clients and cross border finance at Erste Group Immorent. Schlichting speaks about some of the big picture and current issues related to the property markets of Central and Eastern Europe, including where the best opportunities and the most promising new real estate projects are. GRI: Outside of Poland, which CEE country will GRI: Outside of Poland, which CEE country will GRI: Outside of Poland, which CEE country will GRI: Outside of Poland, which CEE country will provide the best opportunity foprovide the best opportunity foprovide the best opportunity foprovide the best opportunity for investors in r investors in r investors in r investors in 2015, and why?2015, and why?2015, and why?2015, and why? Martin Schlichting: Martin Schlichting: Martin Schlichting: Martin Schlichting: Romania and especially Bu-charest is my personal favourite in the region. Even though the economic performance will not contin-ue on last year’s level, I do expect a clearly above

average GDP growth in the next couple of years. Compared to the constantly declining yields, for in-stance in Poland and the Czech Republic, and the rapidly falling yields in Western Europe’s core mar-kets, Bucharest provides a very interesting risk re-turn profile for investors with a higher risk toler-ance. As the biggest market player, we have wit-nessed a significant increase of interest of the inter-national real estate community to acquire A-class office and prime retail assets. We appreciate that they obviously share our view of the Romanian market.

GRI talks to: Martin Schlichting, vice president and head of international clients and cross border finance at Erste Group Immorent What are the hottest subWhat are the hottest subWhat are the hottest subWhat are the hottest sub----sectors in CEE rsectors in CEE rsectors in CEE rsectors in CEE reeeegion gion gion gion real estate?real estate?real estate?real estate?

In 2014 it seems to be industrial/logistics. Especial-ly in the two leading and stable CEE economies of Poland and the Czech Republic. An interesting asset class, but from an investors’ point of view it only makes sense with an experienced management team on the ground and a considerable portfolio size in every individual market you are active. Yield hunting stand alone investments do not make sense at all. Only for the brave and against the background of the current yields and rent levels, I would also add Hungary to this list, especially A-class offices in Budapest, even though the political situation and its impact on the economy – especially on foreign in-vestments – is highly unpredictable. Where are the best opportunistic iWhere are the best opportunistic iWhere are the best opportunistic iWhere are the best opportunistic innnnvestments in vestments in vestments in vestments in CEE?CEE?CEE?CEE? The current yields and rental levels in combination with a comfortable WAULT could give reason to acquire established medium sized retail parks/big boxes (e.g. in Slovakia and Hungary) at very attrac-tive price levels with a comparatively stable income (if F/X risk in Hungary can be minimized). Which counWhich counWhich counWhich countries do you think will provide the tries do you think will provide the tries do you think will provide the tries do you think will provide the future international investment in CEE?future international investment in CEE?future international investment in CEE?future international investment in CEE? It is a fact that the eastern part of the European Un-ion will grow faster than the western part. Those countries which understood to adjust/westernise – their economic and legal environments quicker and to increase market transparency were the winners of the past decade. This won’t change in the future. The question is whether the existing gap in pro-gress amongst CEE countries is narrowing or not and who will manage to catch up in this economic beauty contest. Hungary, for example, could basi-cally attract significantly more foreign money as soon as the political situation has changed or at least become foreseeable. There is a considerable


amount of institutional money available which is waiting for opportunities. We see an increasing in-terest especially from Asia and the Arab region. How is the lending environment in CEE and are How is the lending environment in CEE and are How is the lending environment in CEE and are How is the lending environment in CEE and are there any new players on the scthere any new players on the scthere any new players on the scthere any new players on the sceeeene?ne?ne?ne? Basically, the lending appetite increases but there is still a huge difference [depending on] which coun-tries and especially which development stage we re-fer to. Today it is quite easy to secure senior loans for income producing assets in the saturated parts of CEE like Poland, the Czech Republic and Slo-vakia. On moderate LTV levels and in combination with a sustainable cash flow model, it is even man-ageable in less saturated regions but it still remains a challenging process to obtain development fi-nance at a digestible cost in most countries apart from Poland and the Czech Republic. Even though the situation is getting better from a developers’ perspective, competition is still restricted in most countries. We have not seen new players which will seriously play a decisive role in the future. We can see more or less the usual suspects, apart from those who had to leave the region due to regulatory or strategic issues. We expect pressure on margins and structures in 2015, especially in the markets with the highest liquidity, whereas the situation in exotic markets will remain more or less unchanged. Poland Today is a media partner of the CEE GRI 2014 real estate investment meeting in Warsaw

LATEST LEASE DEALS IN BRIEF LPP LPP LPP LPP has leased a total of almost 5,500 sqm of retail space at Factory outlet centres across Poland. The brands of the group are expected to open their stores in the centres by the end of this year. Devel-

oped by Neinver, Factory is the largest chain of out-let centres in Poland. Factory outlet centres are lo-cated in Warsaw (two centres – in Ursus and in Annopol), Poznań, Wrocław and Kraków.

Factory centres are located in four cities in Poland Image: Nienver H&M H&M H&M H&M has recently leased a total of more than 2,300 sqm of retail space on two floors at the Serenada shopping centre project that developer Mayland Real Estate is planning to develop in Kraków. The Serenada scheme will comprise 43,000 sqm of leas-able space which has already been commercialized in over 50%. Fashion retailers will take up a com-bined 30,000 sqm of space at the mall.

COMING & GOING

Dorota ChDorota ChDorota ChDorota Chomuntowskaomuntowskaomuntowskaomuntowska

Dorota Chomuntowska has recently been appointed as the retail portfolio manager in the property and

asset management department at the Warsaw office of Cushman & Wakefield. She joined the company from JLL where she worked as the director of retail operations. A Certified Property Manager (CPM), Chomuntowska has more than fifteen years of pro-fessional experience. She previously worked at companies including Apsys and Colliers Interna-tional. The appointment of Chomuntowska is related to the cooperation between Cushman & Wakefield and real estate investment management company Tristan Capital Partners which began earlier this year. Cushman & Wakefield manages six retail facil-ities of Tristan Capital Partners which comprise a total of over 100,000 sqm of leasable space. Chomuntowska will oversee the facilities and will be responsible for new acquisitions.

weekly newsletter # 034/ 03rd 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. 34