Urban logistics on a wave

‘Eurobuild CEE’: Segro has been active in Poland for almost two decades. How has the warehousing market evolved during this time and what role has the firm played in it?

Bartosz Michalski, technical development director for Central Europe, Segro: Poland, due to its strategic location in Central Europe, has been an attractive destination for both investors and tenants for many years. The availability of land, the low investment costs and the development of the logistics sector have all contributed to the growth of the warehouse and manufacturing market. Segro’s strategy in Poland has always been based on its presence in major, established logistics locations. These are markets with exceptionally high growth potential and an excellent pool of potential employees – Warsaw, Poznań, Łódź, Stryków, Gliwice, Tychy and Wrocław.

In addition, the growing strength of the e-commerce market that has built up in Poland over the years has created the need for large warehouse areas for the handling of both deliveries and returns. Companies in this sector are looking for warehouses located near major metropolitan areas or that are well connected to them, in order to maximise delivery times and ensure they have qualified employees to handle deliveries.

In turn, growing environmental awareness has led to greater interest in warehouses that meet certain requirements. Many companies in the market are aiming to reduce their carbon footprint by using renewable energy, managing waste efficiently and implementing automation solutions. Segro was also one of the first companies on the market to start using LED lighting in its warehouse parks. Concern for the environment plays an important role in our operations, and our own Responsible Segro programme demonstrates that we are making commitments not only to our clients but also to the environment.

We strive to apply solutions that are expected to bring long-term benefits, both to the business and in terms of reducing the impact on the ecosystem. Our projects emphasise the use of high-quality materials and good thermal insulation, aimed at reducing the life costs of buildings. Most of our parks also have a cloud-based utility monitoring system in place to control and optimise the energy or gas consumption on a daily basis. As a group, our ambition is to become a carbon zero-emission company earlier than EU directives stipulate.

I’ve heard that Segro has just acquired a site near Warsaw. Could you tell us more about what you are planning for this location (e.g. where exactly it is located, how big the project might be, and what kind)?

Recently, our portfolio has been enriched by a 16 ha plot in Warsaw’s Młociny district. Some 60-70,000 sqm of modern urban warehouse and data centre space could be built on the site. This will be Segro’s first investment of its kind in Poland. Due to the strategic location of this area, located within the city limits and good transportation, we are confident that it will soon be our flagship park in the capital.

In addition to traditional storage, Segro has recently been developing data centres. How experienced is your company with this type of project?

It is not entirely true that we have only been doing this recently, because the Segro Group already has many years of experience in this area. At our oldest park, in Slough in the UK, there are over 30 data centres that are either operational or under construction totalling around 250,000 sqm. It is worth noting that Slough now boasts the second largest cluster of data centres in the world after Ashburn, Virginia in the US.

What are the main technical challenges that are involved in building data centres – and how do they differ from logistics, warehousing and light industrial projects?

In the case of data centres, in addition to the administrative approvals and formal issues related to the new investment, the basic thing is to ensure that these facilities have adequate power connection capacity for their various installations (including servers, cooling, etc.). Data centres have a number of specific technical requirements that are difficult to meet in already existing facilities built for different purposes. Due to these requirements, the building is, so to speak, the enclosure for the installations that will be housed in it. For this reason, as well as the data security required, the best solution is a specially designed free-standing facility.

How would you describe the development of the data centre sector in Poland in terms of real estate? How developed is it and what potential does it have?

The demand for space of this type in Poland will only grow. PMR’s ‘Data centre market in Poland 2023’ report shows that two-thirds of Polish enterprises increased their spending on data centre services in 2022 compared to 2021 – and this percentage is set to increase in 2023. One of the big foreign players in the tech industry has now launched its first cloud computing service in the CEE region three years after announcing a billion-dollar investment, which will involve establishing three data centres in and around Warsaw. With more players projected to enter the Polish market, we can expect increased demand for space suitable for data centre operations.

What other types of product is Segro focusing on? Do you still plan to build speculative warehouses? And what about more customised or specialised facilities?

We carry out development projects that are mainly based on pre-lease agreements. Only a small percentage of the space not secured by such contracts accompanies the construction of space built for specific customers. Furthermore, most of this space is generally already leased before the construction is completed. In Poland, we are still generally in the business of building big-box warehouses, but we are also increasingly developing urban warehouses, which are a popular product of ours in Western Europe. In addition to the already-mentioned data centres, we are open to other non-standard projects: for example, in the UK we have completed facilities leased exclusively by Netflix. We always try to respond to client’s needs and look for solutions to find the best option for their particular business operations.

In what direction is the warehouse market in Poland now headed?

Warehouse developers are increasingly betting on green solutions.
I think this is a key market trend. As I have mentioned, at Segro we are consistently applying solutions that aim to bring both business benefits and allow us to operate with respect for the environment. Currently, more than one-third of our warehouse space in Poland is BREEAM-certified, which confirms the portfolio’s environmental credentials. Since 2022, each new Segro facility has been thought-through at the planning stage in terms of solutions to achieve BREEAM certification at the ‘Excellent’ level. Facilities and areas that are well-connected, near national roads or highways, and strategically located at the intersections of transportation routes, will continue to be popular. The development of modern technology to facilitate the day-to-day operations of buildings, such as advances in automation, will also play a key role in addressing growing staff shortages. We are also very interested in developments in artificial intelligence, which is set to revolutionise the services we provide and the way we think about commercial real estate. The future promises to be interesting, to say the least.