PointPark doubles its fun

Ian Worboys, the chief executive officer of P3: If we can double that in 3–5 years I would be very happy. This is a challenge, because there are a few large investors, such as Blackstone and Prologis, who are trying to do virtually the same thing. That puts us in direct competition with funds and developers. It is not going to be easy, but it will be fun and I believe we can do it. One of the reasons why TPG also believes we can do it is that we are a management team with an average of 20 years of warehouse experience. This means that we have contacts with occupiers and investors that we can take advantage of. As for the investment costs, they are going to be in excess of EUR 500 mln.

Where will you be looking?
We are pan-European company. We have a team in the UK, but we don’t have any warehouse space there at the moment so we will try to buy something there. We are looking at all the main core markets, such as Germany, France and the Netherlands, and also at more opportunistic markets, such as Italy and Spain. There are other core European markets, such as Poland, the Czech Republic and Slovakia – but Poland is more core than Czech or Slovakia. And going even further east there are some really opportunistic markets, such as Bulgaria and Romania.

Would you then say that Poland is your main focus of interest in the CEE region, more than the Czech Republic and Slovakia for example?
We have teams in all three regions and opportunities come up in all of them. We want to have a balanced portfolio at the end of the day, so having more in Poland is very important to us. We are able to develop in the two large sites that we own in Poznań and Mszczonów, but our intention is to purchase or develop on all major logistical routes. The main points of interests are the Wrocław region, Silesia and Warsaw – meaning more the city than the region, since we already have a park in Mszczonów outside the capital. We are also looking at Łódź and Stryków. The first transaction could happen within six months.

What kind of products will you be looking for?
We are going to buy land as well as income producing assets. We are interested purely in big warehouses, that is, a minimum of 10,000 sqm – and there is no limit on how big they can be. But in each case the returns have to be good. We are especially interested in the location, how strong the covenant is with the tenant, what stage is the building at, and its age. You have to put together all of those factors and at the end of the day say: yes, we are going to buy in that country, at the end of this month.

And how much of your activity will be buying and how much development?
The majority of it will be investment, because if you want to grow to scale this is the faster way. Warehousing is pretty quick to develop, because when somebody talks to me today it takes just nine months to put them into a building and have income. But with buying I can do this within four to six weeks and already have an income producing investment.

What makes you different from an investment fund?
Funds don’t have experts in specific sectors. They tend to be more generic, since they will buy office buildings, retail and property in other sectors. Funds love to do business with people like us because we are the specialists. We are hands-on with the asset managers and work very closely with the occupiers. A fund particularly wouldn’t want to be spending a lot of time with the business development manager trying to plan the company’s needs for 3–5 years ahead. But we would.

And how much do you think you will you be able to build in the next few years? How much of it is going to be speculative space?
We don’t do a large amount speculatively. Out of our existing property portfolio worth EUR 800 mln, 5 pct of it could be speculative. I believe that we can organically grow another 350,000 sqm in the next three to five years. We have a land bank for around 500,000 sqm.

Last year you were planning an IPO, but you pulled out of it. Are you going to return to these plans in the near future?
We don’t need to look for funds, certainly for the next 3–5 years. At that time TPG will decide on its exit route. Most companies like TPG invest for a certain time. So they have a horizon of 3–7 years and they basically sell everything and return all the profits to those who have invested. Then we will have various options, which could be anything from an IPO, a sale, a management buyout or a merger, but this is so far in the future that there are no concrete plans.

Interview conducted by Rafał Ostrowski