Hitting the restart button

After a stormy year the time has come to sum up the situation on the warehouse market. There is much to suggest that the crisis is now behind us – and that warehousing is preparing for a comeback

The topics seemed similar to those discussed at the nine previous annual meetings of warehouse sector representatives; however, the reality on the ground has now completely changed. Last year everyone was talking about the credit crunch, but 
a few people held on to hopes that it would not affect the Polish real estate and capital market so much. Although admittedly most new projects were put on hold, but a light at the end of the tunnel can finally be seen. “Within the next three years the Polish warehouse market will bounce back,” emphasised Ferdinand Hlobil of Cushman & Wakefield. Nobody has been eager to start new warehouse facilities in the last few months, with the effect that empty halls are slowly filling up. Danny Kambo of GSE, Bożena Krawczyk of Segro and Matthias Sandfort of Helaba talked about the warehouse market’s bright future in the discussion panel entitled ‘Here Comes The Sun?’. Despite the banks’ lack of willingness to finance new projects, developers have remained active – albeit with a slightly altered approach. 
  “The market was calm, but it was a good time to make decisions about investment and to sign contracts,” explained Bożena Krawczyk from Segro. There was also a note of optimism in the voice of Matthias Sandfort of Helaba. “The banking sector has been given a second wind and a will to finance commercial projects is more and more evident. However, it is still not clear when the process will fully swing into action.”
 And what is the best development strategy during the crisis? Perhaps focusing on built-to-suit warehouses?... “Our requirements as a tenant are not being met by what is on offer in facilities that are built speculatively, i.e. for everyone,” complained Rafał Szydłowski of Neuca, and Dariusz Kierski of Grupa Muszkieterów had a similar opinion. In spite of this, the largest logistics developers, such as ProLogis and Panattoni, are still building mostly speculative facilities. “You need to be able to reconcile two worlds: the world of the developer and the world of the tenant,” concluded Robert Dobrzycki of Panattoni Europe. He believes he has managed to do just that – as does ProLogis the company’s CEE managing director Ben Bannatyne and the moderator of the discussion explained. Błażej Ciesielczak of Goodman Poland also claimed to have achieved the same feat.

The participants of the conference could also assess the potential of built-to-suit projects during a short coffee break. Immediately after the break, Hadley Dean of Colliers International (the moderator), Michał Sternicki of Areal Bank, John Palmer of Brittain Hadley Europe and Bartłomiej Hofman of Europolis Real Estate started a discussion panel entitled: ‘Sitting on a Gold Mine’. After the previous heated discussion about built-to-suit warehouses, it might have been supposed that the subject had been exhausted. Yet you would not have been further from the truth. It was this issue that started the next presentation, and (more specifically) how to acquire the finance in order to build for actual tenants and in accordance with their needs? However, these issues did not dominate the whole discussion. Money and the way to generate it remained the most important topic. Profit margins, yields, loan-to-value ratios – these are still the priorities for the warehouse business. Over 100 participants could find out a little less about financing, and a little more about project location, in the discussion panel entitled ‘A New Place in the Sun’, focusing on a summary of the warehouse sector in CEE countries other than Poland.
Tom Listowski of CB Richard Ellis opened the panel with a presentation on the situation for the whole region. Participating in this discussion were Piotr Bzowski of PointPark Properties Poland, Stijn Meeus of FedEx Central and Eastern Europe and John Clements of Helios Europe. Despite the fact that Poland is out in the lead, and that it will take a long time for the Romanian or Bulgarian warehouse markets to be as developed as ours, they nevertheless have the potential for dynamic growth – as opposed to Ukraine, a location where companies are still willing to invest. According to the panel, it is a dangerous and unstable country – both politically and economically. After some informal chat over lunch, it was time for a discussion topic which got everyone – but mostly drivers – interested. Lech Witecki, acting General Director of National Roads and Motorways, Robert Gajor of Wikana Invest, Ewa Śmigielska of Real Management and Waldemar Olejnik of Segro took part in a discussion panel moderated by Emil Górecki of ‘Eurobuild CEE’. Lech Witecki had driven to the conference with a map-key for all the next major warehousing projects, because it is the location of the roads that determines whether to purchase a given plot of land or look for a better site with easier access. ‘The Older, the Better’ was title of the next panel, and was led by Renata Osiecka of Axis Real Estate and included Robert Nobis of Colliers International, Piotr Król of Poltraf and Mirosław Koszany of Biuro Inwestycji Kapitałowych (BIK). The analysis of both the pros and cons of older facilities was of interest to anyone who would like to lease such a facility at a slightly lower price. Despite the great choice of new warehouses on offer, tenants appreciate the good management of older facilities and often choose to stay for that very reason. Because trust and long-standing friendship really does count in business. ν (ZW)