MLP version 2.0
Warehouse & industrialjournalist
Rafał Ostrowski ‘Eurobuild Central & Eastern Europe’: A year ago you said that you would double the total area of warehouses from 350,000 sqm to 700,000 sqm within three years. Has anything changed?
Radosław T. Krochta, CEO and vice-president of the board at MLP Group: We have a great chance of executing the plan a year in advance by reaching 700,000 sqm this year. Last year was a record one for us, when we signed contracts for app. 200,000 sqm. H1 2015 also looks very promising. We are planning to sign contracts for app. 100,000 sqm. You need to remember that the entire Polish market equals app. 800,000-900,000 sqm per year so our 200,000 sqm per year is a very good result which provides us with the position of the market leader.
What are you planning to do next?
We are quite focused on our expansion on the German market and we will probably make an investment there in Q1 or Q2 2015. These will be parks with several dozen thousand square metres. We want to build a strong position on the German market.
Are many tenants interested in German warehouses?
Yes, there are. We are now in advanced negotiations with potential tenants and land owners.
This is quite a saturated market, isn’t that right?
This is first of all a different market. Developers there are not allowed to reserve land before buying it, as is the case inPoland. Here the common practice is for a developer to sign a so-called option with the land owner, i.e. a unilaterally binding agreement which provides the developer with the right to buy the land at a stipulated price within a year or two but it does not oblige them to do it.
What other market differences are there?
Virtually each factory and company inGermanyhas its own warehouse.
You are entering a mature market. Are you not afraid?
And what are our alternatives?Russia?Ukraine? We were present inRomaniaand we are not planning to go back there for now. We have to exitPolandbecause in 2015 we will have built 200,000 sqm here and we are planning a similar volume in the following year. Such an area gives us the number three position inPolandwithout any problems. We need to think about what to do next.
What next in Poland?
First of all,Upper Silesia. In Q1 we will start two parks in theKatowiceconurbation. We already haveTychyand Bieruń, so there will be four in total. App. 100,000 sqm each. Secondly, there will a park of a similar size built nearPoznań. We also have two parks there already – the construction of the next one, Poznań III, will also start in Q2 or Q3 2015.
And why are four parks needed in Silesia?
This is dictated by the demand. Half of enquiries we are getting today are aboutSilesia. This is the industrial and business centre ofPoland. The infrastructure has improved considerably and it is much easier to distribute components and goods to theCzechRepublicand further on to southern Europe fromSilesiathan from the centre ofPoland.
And what is the tenant interest in the parks you have started the construction on this year, I mean Kąty Wrocławskie and Lublin?
The first building inLublin(app. 10,000 sqm) has already been handed over to the tenant. We are currently negotiating two next contracts, app. 10,000 sqm each. We will most probably sign one of them at the beginning of 2015. So everything is on schedule. The entire park will be finished in Q4 2015 or in Q1 2016.
And what about Wrocław?
We are currently in negotiations with one tenant and we will probably start the construction of the first few warehouses in Q2 or Q3 2015.
Are you planning any speculative projects?
Yes, we are thinking about speculative projects in Pruszków II andPoznańI (in Koninek). In Pruszków we are considering the construction of app. 10,000 sqm, and as far asPoznańis concerned it will be app. 10,000–15,000 sqm. It sometimes happens that clients, particularly logistics firms, say that they need a warehouse in three months’ time – it is not possible to build anything in such a short period. We would lose such clients as they would go to our competition.
And what about MLP’s project in Łódź. It is even mentioned on your website.
We have a plot reserved there and we are analysing the possibilities. Will we carry this project out? I do not know. Łódź is not our priority. Today we have to considerably extend our presence inWrocław.
In 2014 you became the general director of MLP, does this involve any change in strategy?
We have changed almost the entire sales department, the head of the legal department and the technical department has changed. So far the company has been perceived as one that grows very slowly. This year there was probably no other developer signing as many contracts as us. We have also changed our image: MLP resembled a family business earlier, today we are a large corporate player. The changes have been quite drastic, but sometimes this is necessary if a company wants to develop.
So the personal changes were the most important?
It is more about the fact that today it is version 2.0 of MLP. It is a completely different company compared to only a year ago. For me our best asset is our excellent team. Because of the fact that we reserve land in one place or another requires work. If you have good capital, which we do have today, you can achieve a great deal.
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