PT Urban Issues No. 005

No. 005 / 10th March 2014 / www.poland-today.pl / magazine, conferences, portal, newsletter

Newsletter Editor: Adam Zdrodowski

[email protected]

tel. +48 504 182 308

OFFICE BBI Development hopes to launch construction on its Centrum Marszałkowska office project in downtown Warsaw at the turn of this year page 2

RETAIL Echo Investment has revealed a new design of the retail project it wants to build on the site of the former Cracovia hotel in Kraków page 3 The Futura Park Kraków retail park has obtained a BREEAM In-Use certificate page 3

RESIDENTIAL Ronson Development plans to launch construction on ten projects across Poland this year page 4 Hochtief Polska has started pre-sales of apartments in the second phase of the JK51 scheme in Warsaw page 4

INTERVIEW Poland Today talks to Maximilian Mendel, associate director, CEE research & advisory, at REAS, about the rising investor interest in residential property in Poland page 5

LATEST LEASE DEALS IN BRIEF Recent lease transactions in the office, retail and warehouse sectors page 6

COMING & GOING Artur Filipiuk, Adgar Group page 6

Facts &Figures Largest completions, largest lease deals and rents in the commercial property market in 2013 page 7

Griffin Group CEO Przemysław Krych Photo: Griffin Group

Griffin acquires Jupiter site in WarsawGriffin acquires Jupiter site in WarsawGriffin acquires Jupiter site in WarsawGriffin acquires Jupiter site in Warsaw Real estate investor Griffin Group has acquired the Jupiter shopping centre in Warsaw. The company is expected to devel-op a new large-scale commercial project on the site in a few years. page 2

Single ticket price: 1,150 PLNEarly bird registration: 950 PLN (till March 17th)

Content: tel. +48 694 922 [email protected] Sponsorship: tel. +48 602 223 [email protected] Registration: tel. +48 602 224 [email protected]

Conference: Primetime Warsaw 2 Developing a sustainable European metropolis3 April 2014, Conference Center Muranów, The Museum of the History of Polish Jews

LEAD SPEAkErS:

• Keynote: Mrs Elżbieta Bieńkowska, Deputy Prime Minister & Minister of Infrastructure and Development

• Professor Hanna Gronkiewicz-Waltz, Mayor of the City of Warsaw

• Professor Sven Bienert, MrICS, Professor of Sustainable real Estate at the University of regensburg and ULI Sustainability Fellow (Europe’s leading expert in the financial implications of sustainable development)

ToPICS:

• Infrastructural and Social Challenges for Warsaw within the new European Funds Perspective 2014-2020

• Wola & Praga: two of Warsaw’s most dynamic districts, soon to be joined by the 2nd metro line

• Cutting away the ‘green’ Pr fluff: what are the financial results and implications of sustainable development?

• Can Warsaw come up with a comprehensive ‘high street retail’ plan?

• Trends & issues in the office and retail sectors

• The art of Placemaking: creating attractive public spaces in and around commercial properties

Building on the success of our first conference about Poland's capital, we bring you all the major issues and opportunities, in Central Europe's pre-eminent city.

Patrons Partnersorganizing Partner

Media Partner

weekly newsletter # 005 / 10th March 2014 / page 2

INVESTMENT MARKET

Griffin Group acquires Griffin Group acquires Griffin Group acquires Griffin Group acquires Jupiter shopping Jupiter shopping Jupiter shopping Jupiter shopping centre in Warsawcentre in Warsawcentre in Warsawcentre in Warsaw

Real estate investor Griffin Group has recently ac-quired the Jupiter shopping centre in Warsaw, along with 2.5 hectares of land, from the Spanish Catalunya Banc. The value of the transaction has not been disclosed. The property in question is lo-cated at ul. Towarowa 22 in the Wola district of the Polish capital. Its acquisition was finalized at the end of December last year, but due to the terms of the agreement it could not be announced earlier, Griffin Group said in a statement. The investor is currently considering a number of possible options with regard to the future redevel-opment of the Jupiter site. For the next two to three years, the existing shopping centre will continue to operate, Griffin Group said in the statement. Prze-mysław Krych, CEO at the company, said in the statement that the Jupiter site is attractive due to its location and its potential for being redeveloped in a different way. “We are going to make use of that in the future,” Krych said. The size of the new project that Griffin Group will develop on the Jupiter site is not known yet, but ac-cording to Emil Domeracki, senior associate, land agency, at Colliers International, the plot could probably house up to 80,000 sqm of leasable space. If Griffin Group is actually planning to develop that much space on the site, this would mean that the company paid approximately €40 million, or even more, for the property, Domeracki said. Another

market source estimated the value at between €30 million and €40 million.

Griffin Group CEO Przemysław Krych said the Ju-piter site has potential for redevelopment

Image: Griffin Group

Domeracki noted that the plot in question in well located and enjoys good visibility. Besides, the ex-isting Jupiter shopping centre is well known in Warsaw and is going to provide Griffin Group with rent revenues until the company decides to launch the new investment. Domeracki said that Griffin Group will probably decide to develop both office and retail space on the Jupiter site. The previous owner of the property secured a planning decision that allows for the construction of two high-rise buildings on the plot. According to Mikołaj Martynuska, senior director, development consultancy, at CBRE, Griffin Group may choose not to develop high-rise buildings on the Jupiter site because of the large number of of-fice towers that are planned by other developers in the neighbourhood. A large-scale retail project would be an ideal solution for this location, he said.

The urban development of both the entire modern Wola district and the Towarowa corridor, as well as strong market fundamentals would support such a scheme. To a certain extent, also a classic mixed-use development with several mid-rise buildings featuring approximately 10-12 floors of office and residential space would work well, he added. The portfolio of Griffin Group includes a number of other retail properties across Poland, including Hala Koszyki in Warsaw, Dom Handlowy Renoma in Wrocław and Supersam in Katowice. The com-pany also owns building land and office assets. Ear-lier this year, Griffin Group announced the acquisi-tion of the Nordic Park, Bliski Office Center and Company House II office buildings in Warsaw.

OFFICE

BBI to launch new BBI to launch new BBI to launch new BBI to launch new office project at the office project at the office project at the office project at the turn of the yearturn of the yearturn of the yearturn of the year

Warsaw Stock Exchange-listed developer BBI De-velopment hopes to be able to launch construction on its planned Centrum Marszałkowska office pro-ject in the downtown of the Polish capital at the turn of this year. Michał Skotnicki, president of the management board at the company, said that BBI Development has secured a favourable planning de-cision and is currently waiting for the municipal au-thorities to issue a final building permit for the scheme. Work on the adaptation of the existing under-ground infrastructure for the needs of the invest-ment, which will help connect the Centrum Mar-


szałkowska development with the nearby Świętok-rzyska underground station, has already finished, Skotnicki said. The planned project, located at the intersection of the existing and the under-construction underground lines in Warsaw, is ex-pected to be the first scheme in the Polish capital with an own direct access to an underground sta-tion.

The Centrum Marszałkowska project will deliver more than 13,500 sqm of office and retail space Image: BBI Development

The ten-floor Centrum Marszałkowska investment will be developed on the site of the existing Sezam retail facility and is expected to comprise more than 13,500 sqm of office and retail space. Due to the prestigious location of the Centrum Marszałkowska development, there is already a considerable tenant interest in the scheme but it is yet too early to reveal any details related to the commercialization proc-ess, Skotnicki said.

RETAIL

Echo Investment Echo Investment Echo Investment Echo Investment unveils design of new unveils design of new unveils design of new unveils design of new Kraków schemeKraków schemeKraków schemeKraków scheme

Warsaw Stock Exchange-listed developer Echo In-vestment has revealed a new architectural design of the retail project which it plans to develop on the site of the former Cracovia hotel in Kraków. The planned scheme, which has been designed by the DDJM studio, will comprise a total of 25,000 sqm of space, including approximately 17,000 sqm of retail areas, and will, apart from stores, also house cafes, restaurants, cinemas and a museum. Wojciech Gepner, PR manager at Echo Investment, said the investment will involve the demolition of the existing building, which due to its very poor technical condition cannot be modernized, and the construction of a new structure in its place. Gepner added that Echo Investment is still waiting for the municipal authorities to enact a new zoning plan for the area in which the project will be located, which would allow for the development of the scheme. Kraków City Hall has so far had a negative opinion of the project, claiming that its delivery will nega-tively influence the traffic in the area in question. The fact that Cracovia is entered in a historic build-ings register makes things even more difficult for Echo Investment. However, now the developer and the city authorities seem to be a bit closer to reach-ing a compromise. After the official presentation of the new design of the planned scheme, Kraków

Mayor Jacek Majchrowski described it as accept-able.

The planned scheme will be developed on the site of the former Cracovia hotel building Image: Echo Investment

RETAIL

Futura Park Kraków Futura Park Kraków Futura Park Kraków Futura Park Kraków with BREEAM Inwith BREEAM Inwith BREEAM Inwith BREEAM In----Use Use Use Use certificatecertificatecertificatecertificate

Real estate developer, investor and manager Nein-ver has secured a BREEAM In-Use certificate of energy efficiency and environmental performance for its operating Futura Park Kraków retail park in Modlniczka near Kraków. Opened in October 2011, the facility combines an outlet centre with a tradi-tional shopping centre and comprises a total of 42,000 sqm of retail space, as well as parking spaces for 1,400 cars. The number of BREEAM-certified retail projects in Poland is growing, said Regina Gul, LEED AP BD+C, BREEAM Assessor, BREEAM In-Use audi-tor, senior project manager, project and develop-


ment services, at JLL. Retail schemes in the country which already have such certification include An-nopol Factory in Warsaw, CH Ogrody in Elbląg, CH Europa Centralna in Gliwice, Galeria Amber in Kalisz, Plac Unii Shopping Centre in Warsaw and Solna Shopping Centre in Inowrocław, Gul said. According to JLL data, at the end of 2012 there was over 1.4 million sqm of certified retail space in com-pleted projects in Central and Eastern Europe. Ap-proximately 74% of the certified shopping centre space was located in Poland, a JLL report published last year said. As of the end of 2012, 140,000 sqm of retail space in Poland was in the process of being certified. However, Gul noted that green certifi-cates are still more popular in the office sector – ac-cording to JLL data, there is now around 800,000 sqm of certified office space in Poland.

RESIDENTIAL

Ronson planning to Ronson planning to Ronson planning to Ronson planning to step up itsstep up itsstep up itsstep up its development activitydevelopment activitydevelopment activitydevelopment activity

Warsaw Stock Exchange-listed developer Ronson Development is planning to launch construction on a host of new residential projects across Poland this year as the company sees its apartment sales results improve. Last year, Ronson Development sold 572 apartments, compared to the 380 housing units off-loaded in 2012. This translates into a 50% y/y in-crease in apartment sales and means that the sales result was 14% better than the company had pre-dicted, said Tomasz Łapiński, financial director at the developer.

Ronson Development is now developing projects including Tamka in Warsaw

Image: Ronson Development

This year, Ronson Development wants to launch construction and apartment sales in a combined ten projects, including four schemes in new locations and six new phases of the already ongoing devel-opments. The new investments will include the first phases of three projects in Warsaw – Moko (190 apartments), Jaśminowa (101 apartments) and Skierniewicka (133 apartments) – and the first phase of the Copernicus scheme in Poznań. The developments that the company plans to launch this year will comprise a total of more than 1,200 apartments. Łapiński said that the developer now wants to be able to be developing from ten to fifteen projects at the same time. Ronson Develop-ment hopes that it will be able to further increase its sales in 2014, which should reach the level of 650 apartments, said Andrzej Gutowski, sales and mar-keting director at the company. Ronson Development has been active in the resi-dential market in Poland since 2000. The company is currently present in four cities in the country –

Warsaw, Poznań, Wrocław and Szczecin. As of the end of last year, Ronson Development was offering 809 apartments for sale. The company was planning a combined 20 projects with a total of almost 4,900 housing units in the four cities in which it is pre-sent.

RESIDENTIAL

Hochtief launching Hochtief launching Hochtief launching Hochtief launching second phase of JK51 second phase of JK51 second phase of JK51 second phase of JK51 project in Warsawproject in Warsawproject in Warsawproject in Warsaw

Hochtief Polska has launched pre-sales of apart-ments in the second phase of its JK51 multi-family residential project in Warsaw. Construction on that phase of the scheme is scheduled to start in the third quarter of this year and finish in Q2 2016. The JK51 development is located on ul. Jana Kazimierza in the Wola district of the Polish capital and com-prises two buildings. The second phase of the in-vestment is set to deliver 111 apartments.

The second phase of the JK51 scheme is sched-uled to be completed in Q2 2016

Image: Hochtief Polska


Construction on the first phase of the JK51project, which is expected to deliver 163 housing units, commenced in the third quarter of last year and is scheduled to finish in the first quarter of 2015. The scheme is the second residential development for which Hochtief Polska, best known for its construc-tion services, is acting as both the developer and the general contractor. The company earlier developed the Villa Poema investment in the Żoliborz district of Warsaw. “We are constantly analyzing development pros-pects in the residential sector and opportunities to get involved in new projects,” said Maria Piłat, communication manager at Hochtief Polska. The area of ul. Jana Kazimierza in the Wola district of Warsaw, where the JK51 scheme is located, has be-come highly popular with residential developers in recent years. Companies including Bouygues Im-mobilier and Ronson Development are now build-ing apartments there.

INTERVIEW

Foreign investors Foreign investors Foreign investors Foreign investors interested in housing interested in housing interested in housing interested in housing property in Polandproperty in Polandproperty in Polandproperty in Poland

Poland Today talks to Maximilian Mendel, associate director, CEE research & advisory, at residential consultancy REAS, about the rising investor interest in housing property in Poland and the effects it may bring for the developer market in the country.

Adam Zdrodowski: There is more and more talk Adam Zdrodowski: There is more and more talk Adam Zdrodowski: There is more and more talk Adam Zdrodowski: There is more and more talk about international investors being interesabout international investors being interesabout international investors being interesabout international investors being interestttted in ed in ed in ed in

residential property in Poland. Are some of them residential property in Poland. Are some of them residential property in Poland. Are some of them residential property in Poland. Are some of them already active in thalready active in thalready active in thalready active in the country or is it something e country or is it something e country or is it something e country or is it something that is expected to happen in the near fthat is expected to happen in the near fthat is expected to happen in the near fthat is expected to happen in the near fuuuuture?ture?ture?ture?

Maximilian MendelMaximilian MendelMaximilian MendelMaximilian Mendel: Already a year ago, many in-ternational investors were interested in opportuni-ties in the residential market in Poland. However, now they have started to look at particular invest-ments. There is now an interesting window of op-portunity in the market. The demand fundamentals of the housing sector in Poland's major cities are remarkably strong. At the same time, many devel-opers find it hard to obtain financing and look for alternative funding. Then again, many foreign in-vestors have difficulties in finding attractive in-vestments in their home countries. This makes a perfect match.

Poland Today talks to: Maximilian Mendel, associate di-rector, CEE research & advisory, at REAS

What kind of investors and from which couWhat kind of investors and from which couWhat kind of investors and from which couWhat kind of investors and from which counnnntries tries tries tries are mostly interested in buying apartments in are mostly interested in buying apartments in are mostly interested in buying apartments in are mostly interested in buying apartments in Poland?Poland?Poland?Poland?

Unlike during the great housing boom after the EU accession, these are not speculative investors any-more. Today, there is a growing interest from funds with a long-term vision. More and more people are viewing Poland as one of Europe's core markets, ra-ther than as an emerging market. Traditionally, there is a lot of interest from investors from the UK, Israel and North America. German, Austrian and Dutch investors particularly look at investment op-portunities in the rental sector.

Which residential products are they eyeing and Which residential products are they eyeing and Which residential products are they eyeing and Which residential products are they eyeing and in which locations?in which locations?in which locations?in which locations?

These investors do not look at individual apart-ments. They look at the greater picture. A few of them consider bulk buys of apartments in distressed projects. Large funds rather think about joint ven-ture partnerships or consider company buyouts or purchases of land portfolios. Today's investments have to open the door to the market. The investors want to be part of the residential development sec-tor in a long-term perspective.

A specific product class is rental property. Funds are typically interested exclusively in purchasing entire buildings and no "Swiss cheese". Due to the lack of existing rental stock, the market will depend on initial investors who will build up the first rental portfolios in cooperation with developers. Regard-ing the locations that they will choose, good public transport links and proximity to the main employ-ment areas will be the key factors here.


How will this increased investor interest inflHow will this increased investor interest inflHow will this increased investor interest inflHow will this increased investor interest influ-u-u-u-ence the supply side of the market?ence the supply side of the market?ence the supply side of the market?ence the supply side of the market?

Due to the financing deficit on the market, the de-veloper sector has started to undergo a consolida-tion process. These new investors have a chance to put themselves in a good position. Investments in JV partnerships and mezzanine finance could not only help local developers to endure the difficult times, but also to grow and to get a larger market share. Investments in rental property will help to diversify the market and to cater for the needs of mobile households.

MAXIMILIAN MENDEL Maximilian Mendel joined REAS in 2006. He previously gained relevant work experience in the banking sector, housing and spatial planning. Mendel studied urban planning at the University of Dortmund in Germany and is currently a PhD student at the Polish Academy of Sciences.

LATEST LEASE DEALS IN BRIEF

Gdański Business Center

Image: HB Reavis

Provident Polska Provident Polska Provident Polska Provident Polska will take up more than 4,000 sqm of space at phase A of the Gdański Business Center office project which developer HB Reavis is currently building in downtown Warsaw. The Gdański Business Center scheme is located close to the Gdański railway station in the Polish capital and will comprise a total of over 46,300 sqm of space.

Mokotów Nova

Image: Savills

Fashion retailer H&M H&M H&M H&M is going to open its store at the Galeria Bursztynowa shopping centre project that developer Narev Inwestycje is currently devel-oping in Ostrołęka in north-eastern Poland. The company has leased 1,530 sqm at the scheme which will comprise a total of approximately 32,000 sqm of usable space and is scheduled to open for busi-ness in May this year. Platforma Mediowa Point Group Platforma Mediowa Point Group Platforma Mediowa Point Group Platforma Mediowa Point Group has leased over 1,200 sqm of space at Batory Office Building II in Warsaw. Completed in 2009 and owned by Lie-brecht & wooD, the facility is now fully leased out. Batory Office Building II is located in the Włochy district of the Polish capital and offers more than 7,800 sqm of leasable space. The Polish branch of

Yamaha Motor has just extended its lease agree-ment for 320 sqm of office space at the building. Tourism services and products provider eSKY.pl eSKY.pl eSKY.pl eSKY.pl has leased 730 sqm of office space at the Mokotów Nova office building in Warsaw. Savills represented the tenant in the negotiations process. The Mokotów Nova building offers more than 43,600 sqm of leasable space. It is owned by the Curzon Capital Partners III core plus real estate fund which is managed by Tristan Capital Partners.

COMING & GOING

Artur FilipiukArtur FilipiukArtur FilipiukArtur Filipiuk

Artur Filipiuk has joined Adgar Group as an opera-tional director responsible for the supervision of the technical modernization of the Adgar Park West of-fice complex in Warsaw, among other things. Filipiuk is a graduate of the Warsaw University of Technology and has five years of professional expe-rience in the management of technical projects. He previously worked for Sodexo Polska where he co-operated with clients including Prologis, Hines and Adgar.

Registration till 20 March 2014:www.prospectsinpoland.com

During the 3rd logistics conference in Gliwice, representatives of the City, sector experts, investors interested in the region, as well as those who have already put their money in, will discuss how to maximise the potential of the city and its surroundings.

Conference: Hub Silesia – logistics as a driver of the region's economic growth 26 March 2014, hotel Silvia Gold, Gliwice

Organizer Media Patrons

weekly newsletter # 005/ 10th March 2014 / page 7

FACTS & FIGURES

LaLaLaLargest industrialrgest industrialrgest industrialrgest industrial projects delivered in 2013projects delivered in 2013projects delivered in 2013projects delivered in 2013

Location Project Developer Area

(sqm)

Wrocław Panattoni BTS Lear Panattoni 32,300

Silesia SEGRO Business Park Gli-

wice Building B SEGRO 31,700

Warsaw Tulipan Park Warszawa

Bulding B SEGRO 24,000

Silesia SEGRO Industrial Park

Tychy B SEGRO 18,300

Wrocław Prologs Park Wrocław V Prologis 18,282

Source: Colliers International

Largest office projects delivered in 2013Largest office projects delivered in 2013Largest office projects delivered in 2013Largest office projects delivered in 2013


(sqm)

Warsaw Konstruktorska

Business Center HB Reavis 48,300

Warsaw Miasteczko Orange Bouygues Immobilier 43,700

Warsaw Plac Unii BBI Development

/Liebrecht & wooD 41,300

Warsaw Marynarska 12 Ghelamco 40,000

Wrocław Sky Tower LC Corp 28,100


LaLaLaLargest retailrgest retailrgest retailrgest retail projects delivered in 2013projects delivered in 2013projects delivered in 2013projects delivered in 2013


(sqm)

Gliwice Europa Centralna Helical Poland 67,000

Kraków Galeria Bronowice Immochan 60,000

Poznań Poznań City Center TriGranit 58,000

Gdynia

Centrum Riviera

(Wzgórze

– extension)

Mayland Real Estate 70,500

Katowice Galeria Katowice

Meyer Bergman

European Retail

Partners/ Neinver

42,000


Selected Selected Selected Selected large investment transactions large investment transactions large investment transactions large investment transactions in 2013in 2013in 2013in 2013

Sector

Project

Value

(EUR mil-

lion)

Seller

Buyer

Retail Silesia City

Center

412 Immofinanz Allianz, ECE

Retail Galeria

Kazimierz 180

Globe Trade

Center,

Aventus

Invesco RE

Retail Galeria Domini-

kańska 151.7 ECE

Atrium

European Real

Estate

Office New City

127 ECI

Hines Global

REIT

Office Mokotów Nova

121 Ghelamco

Tristan Capital

Partners

Office Senator

120 Ghelamco

Union

Investment

In-

dustrial

H&M ware-

house

64 Invesco RE W.P. Carey

Indus-

trial Żerań Park II 43.2

Area Property

Parners,

Apollo Rida

Poland

SEGRO


LLLLargest office lease dealsargest office lease dealsargest office lease dealsargest office lease deals in 2013in 2013in 2013in 2013

Location Tenant Area(sqm) Project

Warsaw Polkomtel 22,680 Konstruktorska 4

Warsaw Getin Holding 18,850 Wola Center

Warsaw Urząd Rejestracji Leków 13,000 Adgar Park West

Warsaw Bank Zachodni

WBK 11,800 Atrium 1

Wrocław Getin Holding 11,700 Sky Tower


Retail rents (EUR/sqm/month), Q3 2013Retail rents (EUR/sqm/month), Q3 2013Retail rents (EUR/sqm/month), Q3 2013Retail rents (EUR/sqm/month), Q3 2013

20

30

40

50

60

70

80

90

ŁódźWrocław

Tri-citySzczecin

PoznańKraków

Warsaw (out of town)Silesia

Warsaw (city centre)

Source: Cushman & Wakefield

Office rents (EUR/sqm/month), Q3 2013Office rents (EUR/sqm/month), Q3 2013Office rents (EUR/sqm/month), Q3 2013Office rents (EUR/sqm/month), Q3 2013

Source: Cushman & Wakefield

10 15 20

25

Gdańsk

Szczecin

Katowice

Poznań

Kraków

Wrocław

Warsaw (non-central)

Warsaw (CBD)

Largest industrial lease deals in 2013Largest industrial lease deals in 2013Largest industrial lease deals in 2013Largest industrial lease deals in 2013

Location Tenant Area(sqm) Project

Wrocław Amazon 123,500 Goodman Wrocław South

Logistic Center

Poznań Amazon 100,653 Panattoni Poznań

Wrocław Amazon 100,653 Panattoni Wrocław

Poznań supermarket

chain 82,385 -

Central Po-

land Castorama 49,961 Panattoni Park Stryków


Organizers Partners

Wednesday, March 19, 2014, Villa Foksal, ul. Foksal 3/5, Warszawa

Executive Breakfast:Bydgoszcz open to outsourcing

Registration:[email protected]

On behalf of Rafał Burski, Mayor of Bydgoszcz and Edyta Wiwatowska, CEO of the Bydgoszcz Regional Development Agency, we would like to invite you to an exclusive discussion concerning building the future of Bydgoszcz on the development on modern services for business. Over morning coffee, in the company of market experts, we will seek answers to the crucial question: how to take advantage of the strengths of the local economy to increase the city’s position on the Polish outsourcing investment map.

8:30 - 11:30

Media partners

PT Urban Issues No. 005

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