Leading the marketSmall talk
This September you acquired the recently completed 7R City Flex Gdańsk II warehouse park, and before that you commissioned a number of other projects from 7R. Why are you working together when you are direct competitors?
Jarosław Czechowicz, the country manager of GLP for Poland: These types of transactions demonstrate the potential GLP has to invest in attractive properties that have been developed in the best locations. We want to take advantage of such opportunities just as much as we want to develop our own speculative projects and BTS buildings. Over the last few years, we’ve added completed buildings and logistics centres to our portfolio, including in Bieruń, Rzeszów and around Warsaw.
Your transaction in Gdańsk suggests that it might be worth investing in the north of the country. Which regions now seem the most attractive to you?
We are growing in places where the locations offer us the most opportunities, such as near big cities and international transport routes. We believe the Tricity is one such location and we have now developed around 200,000 sqm of modern space there, in the Pomeranian Logistics Centre just next to the deep-water Baltic Hub port. Moreover, the property we recently bought is an attractive addition to our portfolio and an interesting alternative for our clients in the region. Of course, we are not just expanding our presence in the north of Poland. This year we have also completed the GLP Warsaw V Logistics Centre with an area of 24,000 sqm and we have more projects under development around the capital city. In addition to that, in Wielkopolska we have completed the final stage of the Poznań Airport Logistics Centre, while in Małopolska we have done the same for the Kraków Airport Logistics Centre. These parks are virtually 100 pct leased – to both new tenants and existing occupiers who have taken up more space. We have also launched the development of GLP Kraków Logistics Centre III in Niepołomice and for this park we have secured a record-breaking lease for the region. MCG, which is part of the Maszoński Logistics Group, leased an entire building even before construction work began. Our park in Magnice near Wrocław is also being expanded.
The warehousing market in Poland has recently become more stable. Both developers and tenants are slowing down their activities. Has this affected GLP?
Clearly, after a period of strong development activity, a downturn has inevitably arrived. This is down to the costs of financing and the limited sales of completed projects on the investment market, which itself is due to the economic and geopolitical uncertainty. Meanwhile, the tenant activity in the key markets for us – such as on the outskirts or near large cities – remains more or less similar to what it was last year. This is being driven by the nearshoring trend, which is continuing despite the rent rises, since Poland remains very attractive in terms of costs compared to Western Europe.
Do you think this represents a return to normality after the pandemic and the outbreak of war in Ukraine? What can we expect in the near future?
Above all, it’s worth pointing out that no matter what the situation is with the economy and inflation, and despite the drop in supply, Poland has turned out to be the biggest European market this year in terms of the availability of modern logistics space. We have high quality buildings in Poland and we are introducing an increasing number of ESG solutions. Compared to 2020–2022, there is slightly less demand, which is mainly due to the slower growth of e-commerce. Nonetheless, we are still negotiating with tenants from this segment, even though they are not making their decisions as quickly or early as previously. Regardless of the sector, the costs of running a warehouse and of reorganising supply chains are being analysed very carefully. We are also seeing some firms looking to streamline their operations, which has resulted in them leasing one large area instead of many smaller units, as by doing so they can consolidate all of their logistics operations under one roof.
You mentioned ESG. How important is this trend for the development of the warehousing market in Poland?
We have been receiving many enquiries about energy-efficient buildings, especially for space that is not just for typical warehousing operations but also for manufacturing. This is happening because of the need to make savings as well as corporate commitments to limit CO2 emissions. Despite the reduced investor activity, such buildings remain a first-choice investment product. GLP is one of the absolute leaders in this field, especially when it comes to limiting emissions during construction. We can do this because we employ the right solutions at the design stage, along with our use of the latest technology and our sourcing of materials. We have also set ourselves more ambitious goals – to achieve a net zero carbon footprint for all GLP’s projects across Europe by 2025.
I hear that in your free time you like to go off-roading?
For some time, I’ve often chosen to go travelling with my family in an off-road vehicle around some of Poland’s beautiful but less accessible areas. Such trips are a wonderful way to get away from present worries and they are a great family adventure.
Interview: Anna Korólczyk-Lewandowska