Hybrid developers

Risk is a major item in the cost calculation of a developer of speculative space. A general unpleasant experience for a developer is the eight months his building will stand empty. In the case of a warehouse of some 8,000 sqm floor space, a calculation displays a financial loss of 8 months times 8,000 sqm x 3 EUR/sqm = 192,000 Euro. In a word, a speculative developer should expect that he will not receive such a rent. Clearly he will be delighted should he manage to rent the space before 8 months have passed. Less waiting The Europa Park logistics centre in Mszczonów will expand by two warehouses, each of 13,000 sqm floor space, as the result of a EUR 15 million credit line from the European Bank of Reconstruction and Development. The Europa Distribution Centre which is the project's developer, started building operations without contracting a warehouse space tenant. The obvious question is: "Why did he decide to take such a risk?" Paweł Pia