Quality that pays off for years

Tomasz Cudowski, ‘Eurobuild CEE’: Which clients require the most attention from a development director – new tenants or current ones who want to grow?

Bartosz Michalski, development director, Segro: What makes me particularly happy is the fact that our buildings attract new customers and provide development opportunities for their current tenants – and this wouldn’t be possible without ensuring our partners excellent technical conditions and adhering strictly to quality control standards. We are not a typical developer that sells buildings after renting them – we have to look after filling up and maintaining our tenant portfolio, so our focus is on building a long-term relationship from the first contact with the client. Practice proves that clients appreciate this – they can contact the same owner of the building and the same managers for years, which significantly streamlines their operations. It’s also worth pointing out that providing existing and potential clients with development and expansion opportunities in our logistics parks is one of our clear market advantages.

Such a long-term relationship means that buildings have to be designed the right way – any compromise or makeshift solution could soon come back to bite you.

Of course, that’s why we only employ technological systems that are resistant to the passage of time. Our buildings have increased wall and roof insulation, while the gates and doors are all from reputable suppliers. The intention is for the facility not to require major renovations whenever a tenant moves out. Importantly, clients recognise this – we are increasingly receiving such feedback from the market as: “your buildings are solid, functional, neat and well managed,” along with - and this makes us particularly happy – “the quality of your buildings is better than the competition.”

Segro Logistics Park Łódź

Who has already appreciated this approach? Or rather, what have been Segro’s most significant deals in recent months?

Let’s talk about the newest and the obviously largest ones. A 15,500 sqm warehouse for Komfort was developed within 3.5 months at Segro Logistics Park Stryków. The building has undergone BREEAM certification and was awarded a ‘Very Good’ rating due, among other reasons, to the selective use of modern glazing in the office building, insulating against the excessive heating of the offices in the summer and heat loss in winter. LED lighting has been installed throughout the facility. An automatic licence plate recognition system has been added to the entrance of the building – and, incidentally, we’ve now installed this system in almost all our facilities. In Łódź, we’ve built a 12,200 sqm production and warehouse facility for AQ Wiring Systems. The production hall has eight docks and two ‘0’ gates, and the entire space is air-conditioned – this is also an interesting trend in our projects: it’s not only the office section that has to provide comfortable working conditions. Production areas are also increasingly being fitted with air conditioning. In other respects AQ’s facility resembles a classic office building: comfortable conference rooms equipped with a modern booking system. Energy-efficient LED lighting controlled using the DALI system has also been installed. We have also developed an interesting production and warehouse project for Corning Optical Communications at Segro Logistics Park Stryków. The 39,200 sqm building features the latest PropTech, including a media monitoring system, LED lighting and electric vehicle charging stations. Much was attention has also been given to securing a high degree of comfort – the social and office sections as well as the production hall have been fitted with large windows for better natural light penetration, which significantly improves the well-being of employees. The production area has a resin floor and such functional installations as a busbar network, compressed air and an IT installation. The facility has been awarded a BREEAM certificate with a ‘Very Good’ rating.

However, warehouse developers today are always talking about innovations, especially those with environmental dimensions and that improve the comfort of working.

But Segro not only talks about them – we have been developing and implementing them since the company was founded. We have always known that unless we were pioneers in the field of employee well-being that we would be left behind. That’s why we design all our facilities for their future users. For example, before we began the project for Corning we carried out an employee survey in which they could indicate the ways their former headquarters systems were awkward to work in and what would be desirable in the new location. Based on their opinions, we designed the building to allow natural light in and to have improved acoustics, for example. Furthermore, we made improvements to the design of the rest areas. Special parking zones for car sharing and bike sheds have almost tbecome the standard today. Other eco-trends also include the increasingly popular water distribution systems for reducing its consumption by around 10 pct. Such a balanced approach not only helps in the recruitment of employees but is also a positive response to the problem of global warming.

Segro Logistics Park Stryków

You have recently purchased two large plots near Wrocław and Warsaw. What are your plans for these sites?

We have recently expanded our portfolio with a 17 ha plot in Wrocław for Segro Logistics Park Wrocław, which will comprise 75,000 sqm of modern warehouse and production space. The plot is located just off an entrance to the A4 motorway, a short distance from the junction with the A8. We already have the permits needed to start the construction work and have also received signals from the market confirming that this location is very popular among clients – and we are particularly pleased with this. With the land purchased in Warsaw’s Żerań district we will be able to develop Segro Business Park Warsaw Żerań. A 20,000 sqm warehouse will be built on the revitalised area, with the work due to start in Q2 2020.

All developers are having to face current challenges related to rising construction costs and staff shortages. How is Segro going about handling this?

As far as costs are concerned, what also sets us apart is our many years of experience in cooperating with proven suppliers – regardless of the market conditions, our partners guarantee that development projects can be carried out within the deadlines required by clients, as well as within the previously set budget. In the case of the project for Komfort, the efficient project construction time was made possible due to its fully prefabricated structure – including the hall’s foundations, columns and roof beams, as well as the fully prefabricated external office, made out of reinforced prefab concrete walls and ceilings. Such an approach was expected by the client and we fulfilled this task flawlessly. When it comes to staff-related problems, the strategic location of our buildings helps clients acquire adequately qualified personnel, as proven by our high tenant retention rate and the growing number of expansions within Segro’s logistics parks. The ‘Warehouse and light production market. Challenges and trends in employment’ report we have drawn up together with Randstad reveals that Poland is one of the countries with the highest level of employee turnover in Europe, so we have to think in advance about ensuring excellent transport links for our facilities. To avoid problems related to the labour market, we also cooperate with the local authorities – not only of the districts we build in but of neighbouring ones too, because the employees of logistics facilities are somtimes sourced from more distant areas. We also design our parks to the needs of companies with seasonal employment growth – so additional parking spaces and relaxation zones are then needed. Sometimes we provide three changing rooms in our buildings: men’s, women’s and one in reserve that can be opened during the ‘peak times’.

Segro Logistics Park Wrocław

What are Segro’s plans for the next few years when it comes to new formats and markets?

We certainly won’t be seeing any kind of revolution – experience has taught us that it is systematic, considered development that is most appreciated by the warehouse market. Our strategy for the next few years, as in previous years, involves the launch of new development projects in parallel with growth through prudent acquisitions. Our aim is to have a land bank in all the key locations, so that both current and potential clients can develop in the vicinities of the most important Polish conurbations and major transport routes. We are, of course, keeping a careful eye on the latest market trends, while constantly analysing the land market, to enable us to respond quickly to the needs and expectations of our clients. We plan to strengthen our position on current markets by building more big box facilities, because they’re what’s driving the growth of the market right now. We also intend to expand in the Warsaw small business unit market. It’s also worth adding that Segro’s strategy has for years assumed that facilities are only to be developed where pre-lease agreements have been secured for most or part of the space.

Which investment trends do you consider particularly worthy of continuing?

We will continue to invest in sustainability and proptech, to enable clients to reduce the operation costs of their facilities, as this has been successful so far, and that will not have a negative impact on the environment. By the way, due to the fact that we are a large purchasing group, we can guarantee tenants unbeatable utility rates, mainly for electricity and gas – and this is perfectly compatible with the energy-efficient systems used in our buildings, which not only reduce utility consumption but as can also be clearly seen in the operating costs of the buildings. We are pleased that there is growing awareness among clients of the features and capabilities of facilities built according to sustainable development principles. Through this approach harmonious and beneficial cooperation is guaranteed for many years. ν