In all shapes and sizes

Soon it will be a full decade since Goodman built one of its most unusual logistics centres – in Hong Kong. Interlink is a 22-storey warehouse building with an area of 223,000 sqm. The first 15 floors are directly accessible to delivery vehicles via a system of ramps similar to something you might find in a multi- storey car park. The uppermost floors can be reached by service lifts.

Even though warehouse towers remain something of an Asian speciality, you can already find a few multi-storey facilities dotted around Europe. One company with a taste for building such centres is UK-based developer Segro. The company currently owns a couple of two-storey warehouse buildings, one in London (Heathrow) and the other in Paris (Gennevilliers), but more constructions of this kind could soon be on their way. “We are looking at a number of opportunities in London to develop more multi-level projects in which vehicles can access at least the second floor,” reveals Alan Holland, Segro’s director for Greater London.

Strange brew of uses

In West London, Segro is developing a project on the grounds of a former Nestlé factory, where along with four urban logistics buildings with a combined area of 22,000 sqm, 1,300 apartments are to be built. Segro has entered into a partnership with residential developer Barratt London for this project. The warehouse buildings are to be constructed together with the apartments so that the whole can be better integrated into the district. There is currently strong demand for warehousing built close to city centres, so entire districts are being designed to allow the different functions to sit together. In the case of the Segro/Barratt development, the entrance roads to the residential and warehouse sections have been placed on opposite sides of the 12 ha site, while the two different sections of the investment have been designed to fit together in an architectural sense and are both to be constructed from similar materials.

In Paris, Segro has formed a partnership with office developer Icade to build two office towers with a combined area of 14,000 sqm, beneath which a last-mile logistics centre is to be built. The 75,000 sqm complex is to be created through adapting underground halls that were once part of the Paris Metro.

‘Scuse me while I kiss the sky

Compared to such western extravaganzas, in Poland the warehousing tends to be much more humdrum. However, the latest warehouses constructed for Amazon have certainly raised some eyebrows, since these also have several storeys. Maybe delivery vehicles can’t actually drive up to their top floors, but the size of the centres and the technology used within them is nonetheless impressive. In Świebodzin in western Poland, Panattoni is building a massive warehouse for the internet giant, which will have four floors, each with almost 50,000 sqm. At first glance, this building looks rather different to a traditional warehouse, since it has rows of windows running along each floor, making it look a little like an office block. “Natural lighting was essential because people are going to be working inside,” explains Marek Dobrzycki, the managing director of Panattoni. However, it should also be added that they will be working alongside an army of almost 3,000 robots.

A similar but even larger. four-storey building was built for Amazon by Panattoni in Gliwice in Silesia. Eventually, around 1,000 people are to be employed in the centre and about 3,900 robots. Another such centre can be found in Kołbaskowo near Szczecin. This one is a little smaller, with three storeys and an area of 160,000 sqm. All three buildings have a very different appearance from the centres that were built for Amazon just a few years ago, which were not much different from standard warehouses, with just one floor divided by a mezzanine. The differences in construction result from how the buildings are to be used. Those older buildings were mainly designed as logistics centres for large-sized goods, while the newer centres are generally to be used for distributing smaller items, such as books and electronic goods.

The tallest warehouse in Poland and one of the tallest in Europe is in fact not a very new building. It was built in 2017 by general contractor Awbud for white goods producer Amika in Wronki and is a high-bay warehouse that isn’t divided into levels. The building, which is 46m in height, has shelves from the floor to ceiling with special stacking systems. The automated building can stack or remove 1,600 items in a single hour. 7R is also building a similar (though somewhat less vertiginous) warehouse for grocery chain Żabka. “This will be the most modern fully-automated grocery warehouse in Poland,” claims Bartłomiej Krawiecki, the director of development at 7R. “Standard warehouse buildings of this type have a height of 10m or 11.7m, so in a certain sense this is a breakthrough for the Polish warehouse market. We expect that other companies will want to try out the high-bay system, but this is not as simple as it sounds because in Poland we are not yet ready planning-wise to develop such unusual centres. Our spatial development plans, if they exist at all, allow for warehouse buildings of no more than 20m in height,” admits Joanna Sinkiewicz, the industrial and logistics director at Cushman & Wakefield Poland.

With or without the developer

Sometimes such unusual buildings are erected without the involvement of developers. The production company can instead act as the direct investor and commission a general contractor to construct the centre. If a developer is involved in the project, these buildings are generally owned by the users themselves.

“These are buildings that have to be made to measure and are usually constructed as build-to-own projects, which means the costs are paid for directly by the investor,” explains Marek Kosielski, the BTS director of Axi Immo. However, this should not be treated as the rule. Occasionally there are more complex projects that are developed for rental but tailored to the needs of the client. One example was built by Panattoni for US-owned firm AZZ Speciality Welding Europe. “This is also a non-standard building because one section has a height of 17m,” says Joanna Sinkiewicz. Amazon’s first buildings were all build-to-own, but now the company more often leases its space. Securing the financing for an Amazon project is not a problem. It’s easy to find an investor when such centres sell quickly. With a long lease (of 15–20 years), an investor is buying a steady income stream backed by a strong tenant with a well-known brand. For this reason, despite their non-standard design, Amazon centres command a very high price on the market.

These days warehouses are being built for companies that make extensive use of robots and automation. And they are being put to new uses, such as sorting centres for online retailers, production centres or even service centres. “We are increasingly engaged in discussions with companies in the digital and creative industries; these can be TV or film studios with online streaming platforms, or companies looking for warehousing to use as data centres – there is an unprecedented demand for data centres,” emphasises Alan Holland. One example of such an unusual tenant from the Polish market would be Avenger Flight Group, a company that trains airline pilots. The trainee pilots can hone their skills on a Boeing 737NG flight simulator installed in 7R City Flex Warsaw Airport I near Warsaw’s Chopin Airport. The flight school leases 1,800 sqm in the park, which could eventually house up to six simulators. The company has also leased 950 sqm of office space there, which if necessary could be extended with another floor. “There are modern classrooms and check-in rooms for completing flight simulation schooling. We have even built a mezzanine to allow trainees to easily board the first two simulators,” reveals Bartłomiej Krawiecki of 7R. Another unusual tenant that has leased space this year is Plantlab, which uses hydroponics to grow plants and farm fish. In the US and Asia, growing plants without soil is considered a safer and more profitable way of producing food than traditional agriculture, since it is not dependent on external weather conditions and seasonal production. Plantlab has leased 2,700 sqm of warehouse space in Hillwood Kutno, where it keeps tanks that can hold 900 cubic metres of water. This is the first such tenant in Poland to show that warehouse space needn’t be used just for the storing, picking and packing of farm produce, but can also contribute directly to its production.

Deviation from the norm?

According to Joanna Sinkiewicz of C&W, the demand for non-standard space has been growing. “Above all, this stems from tenants being more aware of what they need and the possibilities for adapting a building for a variety of operations,” she explains.

According to Alan Holland, warehouse buildings will become less standardised and more tailored for individual users. “For the occupier, what happens inside the building is absolutely key to their business – and these processes are getting smarter and more technology-reliant. Therefore, many of them need a different kind of building,” he says.

Clearly, this doesn’t mean that standardised warehouse buildings are about to disappear. “The majority of tenants are still going to be looking for standard warehousing,” points out Marek Kosielski of Axi Immo. But Joanna Sinkiewicz does highlight the speed at which technology is evolving – and especially in the Polish warehouse market. “Most of our warehouses are modern buildings constructed to high standards. If we maintain the current pace of progress and change, the difference between the industrial space we build now and what we will be building in five years could be dramatic,” she suggests. Innovative new solutions always provide a good lesson for any sector – for investors, developers, government officials, managers and even for the fire brigade. “The latest warehousing buildings, such as Amazon’s, have their own previously unencountered specifications, including those related to how they are used and their safety features, such as completely different systems for evacuation and fire control. They have to be treated in administrative procedures as a test case. The entire market is now learning from this,” concludes Marek Kosielski.