“For warehouse centres we can boldly talk about a changing role. Nowadays, they no longer resemble former industrial buildings; there are now logistic parks with round-the-clock security, well tended green areas surrounding the buildings, beautiful façades which are the envy of quite a few office buildings in city centres. This is exactly why we’ve been seeing a clear trend of companies moving their headquarters to offices in logistics centres. And it is also because of the much more attractive rent rates compared to the city centre,” says Anita Pietrykowska, the marketing and communication director at Panattoni Europe.
An office to match
According to Panattoni, office and social space in their warehouse centres is normally around 800 sqm depending on the total area of the building and the tenant’s demand. In some centres it even exceeds 2,000 sqm. Tenants such as Orsay, Neuca, Tesco and H&M all lease such space with Panattoni. On the request of a tenant, a developer may prepare space for rest and refreshment facilities, canteens, as well as server facilities, and smart systems. Such spaces may be fitted with air conditioning and lighting controlled by motion sensors. “We can also offer an appropriate number of parking spaces which is practically impossible in the case of a city centre location. It is worth adding that tenants hold international meetings and conferences in some offices in our parks, which shows the high level of satisfaction among our tenants as well as the prestige of the buildings,” says Anita Pietrykowska.
The French Mullinez group, which manages the Orsay brand, leases over 27,000 sqm in Panattoni Park Wrocław, which is located 15 km from the city. Its warehouse area serves as a distribution centre for all of Europe.At the tenant’s request an office with an area of 2,400 sqm was built, which serves as its head office for the CEE region. The three-storey office building has a lot of social space including rest and refreshment rooms and conference rooms as well as typical office space. One of the rooms in the building has a store window with mannequins and other display items to show how an Orsay outlet should be arranged. This is where marketing techniques are devised for the presentation of new collections before being replicated across the entire chain. Orsay collections are designed and ordered in Panattoni Park Wrocław and later sold in all the brand’s stores across Europe. Orsay’s offices also include a few conference rooms, each named after a famous woman. One of the rooms is used for videoconferences with the company’s German headquarters. Another room, which can accommodate up to 100 people, is used for large meetings with both Polish and foreign employees, including conventions for regional managers, training sessions and conferences.
Keeping an A-class standard
Ideal Idea also develops office space in its warehouse centres. “In our latest office and warehouse complex the ratio of office to warehouse space is 50 pct,” claims Jędrzej Dużyński, the vice-president of Ideal Idea. He believes that it is the first complex in Poland, where tenants can lease offices with a class A finish and with elevators that match those of the latest office projects. “Our tenants are eager to move their company offices to Park IV and they will often decide to relocate from an inner city centre location to our Warsaw centre in order to move everything in under one roof. One such case is Promed, which moved here from Złote Tarasy,” says Jędrzej Dużyński. Ideal Idea also offers offices for lease in its parks without requiring tenants to take up additional warehouse space. One such tenant is XPO Logistics, which chose to lease 500 sqm in Okęcie. “Of course they have a separate entrance to the office building as well as a car park right next to it and an elevator,” explains the vice-president of Ideal Idea.
The demand for office space in logistics complexes has mostly developed close to large conurbations and is on the rise due to the growth of e-commerce and the increasing demand for so-called ‘last mile’ delivery services from the final warehouse facility directly to the home of the customer. “Our latest tenant, Zara from the Inditex group has leased offices and a warehouse, which is strictly for distributing clothing within Warsaw as a result of online sales,” adds Jędrzej Dużyński.
Light comes first
It is clear that office tenants demand good lighting, which is why MLP Group takes particular care of this in its projects. In all its new centres the developer places the offices in a separate building that adjoins a big box warehouse with just one wall. As a result the offices have access to natural light on three sides, which is a substantial improvement compared to traditional offices squeezed into warehouse buildings with access to daylight from one or two sides at the most. “Higher standards involve slightly higher costs but it is also better quality. We look at it from a long-term perspective because we are not a developer who wants to sell its centres straight away,” says Radosław T. Krochta, the CEO of MLP Group. MLP’s office buildings have an area of around 100 - 300 sqm with the remainder of the space set aside for rest and refreshment areas, lockers, changing rooms and toilets.
Around 10 pct of MLP’s tenants also have their headquarters near their warehouses. Of course the standard of the building is higher. And if the client wants to have gold door handles that’s no problem. Anything can be built but it also has to be paid for. However, tenants frequently want a higher standard in order to provide their employees with better conditions. For example logistics operator Cargo-Partner has recently signed a contract within the MLP Pruszków II park, where as well as an 8,000 sqm warehouse area it will also lease 1,300 sqm of office space on three floors. However, half of the third floor will be taken up by a 300-sqm terrace with a lawn. “It is better standard than a lot of office building in the centre,” says Radosław T. Krochta. In most warehouse projects developed by MLP, offices take up 5 pct of the entire space and if it is the tenant’s headquarters, around 10 pct. “There is no problem with leasing such space out again if it is vacated. Besides, an office building is always to a certain extent a built-to-suit project and BTS leases are usually signed for longer periods so the issue of leasing them out again comes up later than with standard buildings,” he explains.
White Star Real Estate is developing a concept of warehouse centres for small business units which it calls ‘flexi-parks’. These parks are in urban locations and offer modules of various sizes with office and warehouse space for lease. Already, 6,500 sqm of offices and 17,000 sqm of warehouse space have been developed as part of the Diamond Business Park Ursus project while a further 10,000 sqm of offices and 17,000 sqm of warehouse space is to be developed in the project’s second and final stage. The A-class office space has large windows with high ceilings and one of the office modules has even been leased by an artist for a studio because of the light and the precise control of the temperature. Access to the centre and parking facilities are also important. Tenants can lease warehouse modules of as little as 1,000 sqm with an office space of 100 sqm or larger. The largest tenant occupies a warehouse of 5,000 sqm but tenants usually lease areas of from 1,000 sqm to 3,000 sqm. The park’s tenants include Wurth, Mobilis, Parker Lane, and TBX Logistic
CTP with interior designer
Office space is also an integral part of CTP warehouse and industrial centres. “The dimensions are flexible due to the variety of operations and the specific needs of each tenant,“ said Jakub Kodr, a senior business developer at CTP Invest and he added that the size of the office and social space for logistics operations is most often equal to 5 pct of the warehouse space. “In CTP, we focus on top quality industrial buildings; therefore, we are able to offer our tenants state-of-the-art facilities and fully adjustable offices for specific business activities, such as R&D and SSC. Some good examples of this are the Honeywell and FEI facilities in CTPark Brno. Each CTP building fully complies with health and safety standards and other regulations,“ he added. Usually at CTP, a tenant cannot only lease an office without any warehouse space; “but this all depends on the current situation within the precise location and if there is a vacancy,“ points out the CTP representative. CTP claims that the standard of office space in their parks is similar to that of office buildings. “Generally, it’s cheaper to rent offices in industrial parks. One of the reasons is that industrial offices are not as deep therefore less integrated equipment is installed on industrial properties. For example tenants do not need raised floors, as usually cable trays are placed under the windows, nor do they need complex air-conditioning systems and ventilation, because the buildings have windows installed that open,” explains Jakub Kodr. CTP works with an interior designer who helps to meet all the requirements of tenants for their office and social space.
senior development manager, industrial and logistic department, Cushman & Wakefield
On average offices take up around 2-3 pct of the space leased when typically leased together with warehouses. On average, office space does not account for more than 8-10 pct of the total space available in a warehouse park. The price of one sqm in a logistics centre ranges between EUR 8 -10 per month plus service charges, which, depending on the size and the location of the park, is PLN 3.80 - 5.50. In comparison, rents for space in office buildings in cities stand at EUR 12-19, plus an additional service charge of PLN 15, although they can vary widely, depending on the location and the class of a building. Due to health and safety requirements, warehouses should feature social and office space, either very small (50-70 sqm), designated only for warehouse employees, or quite large (400-700 sqm), incorporating also workspace for HR, financial and accounting departments. Commercialisation of office space in logistics parks can be challenging, as companies prefer to lease only the amount they really need and often pay only for the actual office space used. In the case of vacant office space they are given the right to sublease it. But, logistics parks are sometimes burdened with surplus offices.