Kings and pretenders

The lowering of the global economic forecast for European countries by the International Monetary Fund, the tightening of the policy for special economic zones, the consolidation on the market, the transition period for projects financed by the European Union (i.e. next year), difficulties in obtaining financing – these are only a few of the trends that could have a negative impact on the warehousing market next year. Only time will tell how damaging the effects will be. This was one view of the future provided by Maciej Chmielewski (Colliers International), who for the sake of the debate pretended to be a pessimist. Tomasz Puch (Jones Lang LaSalle), on the other hand, played the part of the optimist, pointing to the ever-improving transport infrastructure, the increasing demand for investment land, the growing number of new speculative projects and the growing demand for warehouse space, while sketching out the development prospects of warehouse regions until 2015. Who won? It’s hard to say because both experts, despite the personas they had adopted, ultimately turned out to be optimists and concluded that things are and would continue to be good, though there are always going to be some difficulties along the way. This year’s figure for the volume of investment transactions in the sector is set to break the all-time record. However, will we be able to maintain this level in the future? According to Tomasz Puch, we won’t, if only due to the lack of available product. Nevertheless, investors in this sector have not lost their appetite. On the morning of the conference (October 16th), TPG and Ivanhoe Capital announced that they had bought out PointPark Properties. The representatives of the warehouse developer present at the conference declared themselves to be happy with the transaction and that they would also like to go shopping. They were not the only ones, because other developers also have their eyes on acquiring finished properties. This year’s demand for warehouse space will total around 1.7 mln sqm (warehouse owners also closed last year with 1.7 mln sqm leased).
And which of the regions of Poland will be the success story over the next few years? Warsaw or Upper Silesia? This was one question posed by the organiser of the conference – Eurobuild Conferences. “Perhaps, to quote a proverb, when two dogs tussle over a bone, a third will run off with it,” warned Mirosław Koszany (Biuro Inwestycji Kapitałowych). The experts on the panel entitled ‘The Two Brightest Stars’ actually went for such a bone-stealing third option: they agreed that Wrocław will be the star of the sector. Still, “Warsaw is the capital of a country of almost 40 mln,” pointed out Bożena Krawczyk (Segro); and “it will always be the largest market for fast moving goods,” insisted Rafał Michalak (DB Schenker Logistics). In his opinion it is the speed of order fulfilment that is of the greatest importance nowadays, as opposed to the cost of delivery. When the discussion about rent levels began, the logistics company executive also invited Michał Czarnecki (Prologis) to come to the negotiations with his partners, to which the Prologis representative, in agreement with the other developers present, replied by insisting that currently there is a growth trend for rents.
All hail the one true king! In this case, the logistics tenant – unanimously acclaimed by the participants of the next discussion panel, ‘Two Contenders for the Throne’. So it seems that logistics providers do not have to worry about losing their position. However, they could themselves pose a threat to developers. How? It sometimes happens that retail chains undergoing dynamic expansion choose not only to employ the services of distribution specialists but also to lease warehouses built by the logistics company. According to the moderator of the debate, Marek Skrzydlak (Cushman & Wakefield), in less certain times chains take a conservative approach and prefer to transfer the lease-related risks onto the logistics partner, whereas in better times they rent from developers. But what sort of times can we expect? We know there is only one true king, but the questions remain: how long will he reign, and will the other business lines for generating the profit start to grow? Radosław T. Krochta (MLP Group) is a believer in companies involved in light production, while
Wojciech Wieczorek (Fiege) talked up the prospects of a relatively new business channel – sorting centres. The interlocutors also noted the growing potential of regions in Poland that have gone unnoticed by developers so far. Thanks to the development of infrastructure such as the A4 motorway, the warehouse location map should soon include Rzeszów and Lublin. Wojciech Weiss (Graphene Partners) sees significant dormant potential in the TriCity due to its ports. This faith is not shared by Radosław T. Krochta (MLP Group), who is sceptical about the coastline and the Łódź area, but considers Szczecin to be an interesting market.
The most frequent advice offered to warehouse property managers was to maintain good relations with the tenants, to react rapidly to any problems they might have, and to stay on top of the operating costs. These were the answers to a question put by Renata Osiecka (Axi Immo): what to do to increase a property’s value? – especially when we consider that some were constructed and leased a few years ago during the so-called boom and that today’s reality is rather different. Rents are stable with little prospect for growth. A property manager should look first at the costs, and then at the costs and then the costs again. An asset manager, on the other hand, needs to understand what is happening in the economy. “It is not enough to simply react to events, you need to be ready for them and to keep a step ahead of the competition,” stressed Andrzej Wroński (PointPark Properties).
To certify or not to certify warehouse facilities? That is the question – as far as the participants of the presentation that closed the Warsaw conference were concerned. The topic was introduced by Piotr Bzowski (PointPark Properties), who outlined the BREEAM solutions applied in the DC3 PointPark Poznań complex. According to the latest market analyses, the total annual cost of operating such a warehouse can be reduced by EUR 10,000. This is the information tenants have been waiting for. “We, as tenants, are only interested in how much we are able to save, whereas the green certificate question comes second,” admitted Daniel Franke (Rohlig Suus Logistics).
So why seek certification? The experts pointed out that it brings with it marketing and promotion value and the possibility of a thorough analysis and improvement of the building. It can also be used as a tool for comparing a variety of projects in a larger portfolio. After the formal part of the event was over, those attending could share their thoughts on these and many other topics during the cocktail party that closed the conference