The production brief

The common notion of an 'industrial' agent is one of a professional who negotiates leases for warehouse space. What can often be overlooked is that such agents also act as consultants for manufacturers

As to the link that exists between production and warehouse space, the professionals seem divided as to what extent it does, though they'll all agree that for logistics, location is key, whereas for production, utilities, labour costs and then infrastructure matter more. As far as Tomasz Olszewski of Cushman & Wakefield H&B is concerned, the two areas are totally distinct. "Disposing existing production space is difficult because there has to be a perfect match between what's on offer and what the client wants. Normally when someone is looking for a factory, they don't have ten options, just one or two. You need to work hard to find the right partners. Warehouses however are similar to one another and the client who can fit into warehouse A, will also be appropriate for warehouses C and D as well. With warehouse requirements therefore, you have to focus on very small factors, which might prevail in some or more sectors. This market is a lot more competitive."

No relation

Wladyslaw Markowski of Jones Lang LaSalle, however, does perceive a relationship. Of one project his firm has been involved in, that of the Philips factory in Pila, he remarks that it, "allows for either warehousing or production. Of course it would be easier for it to accommodate manufacturing because that's what it was designed for in the first place. But if we introduce loading docks and ramps etc, we can more or less adapt the building to logistics needs. Likewise when you have, for example, good standard warehouse space which is six to ten metres high, it can be converted for light production." Olszewski however sticks to his view that the two activities are separable. "Some people think that you can convert factories into warehouses - of course you can do anything - by raising the roofs for instance, but usually it doesn't work, as the warehouse won't be of class A standard. It's better to maintain the building as a factory, market it well and find the right client."

Consultants not agents

When dealing with these two realms of their work, industrial agents often have to employ different sets of expertise. Whilst with the warehouse sector they'll bring all their refined negotiating skills to a potential deal, with production, a broader knowledge and experience of the market are vital when offering clients the best advice. "With warehouses," says Renata Osiecka of Colliers International, "you have to know the facilities well and be updated on space requirements. You have to know the process, how to lease and negotiate. With factories however, which are mostly built-to-suit projects, you need a wider understanding of the market and the whole country, the special economic zones, who the international players are and the incentives they can receive from both government and the local regions." Because the processes of either assisting a manufacturer in locating a site, then developing a build-to-suit plant or representing them in the sale or lease of a factory, are much more drawn out, than when acting as an agent for warehouse space, they generally demand less intense activity, and put fewer square metres on the clock. "Warehousing is very flexible," says Tomasz Olszewski, "but with production you need to wait. To work with factories you need to know where the general economy is going and have to be highly-focused. It's a much longer process."

Lease or buy?

The average manufacturer is not particularly keen on leasing factory space. When one does choose to pay rent rather than own a plant it is mostly because, "they have a fixed contract with a local production facility and this can be as if they are a sub-contractor for a bigger factory elsewhere in Poland," according to Renata Osiecka. "If a company however has a global, strategic purpose for being in the country they're more likely to want to own the building," she adds. "I would say there is no visible trend," says Wladyslaw Marchowski, "however, renting can be less attractive as developers require longer leases and higher rents, to offset the fact that premises are tailor- made to an occupier's needs and become outdated very quickly." Other obstacles to leasing production space in Poland are that there is a maximum ten-year limit on agreements and plant machinery can be more expensive than the buildings sheltering it.