Coffee with Craig Show – daily CRE news covering the CEE region Friday, May 27 with Winston Norman, Editor and Chief of EuropaProperty.com.
“Logistics and industrial sector: development paths from the 2022 perspective”
According to the 7R and Colliers report “Logistics and Industrial Sector: Development Paths from the 2022 Perspective”. The volume of investment deals in the Polish market of industrial and logistics properties in the first quarter of 2022 was €191 million. And although the current economic situation and the high level of uncertainty related to the war in Ukraine pose new challenges for the logistics sector, in the long term, there will be no significant changes in terms of the volume of demand and supply.
“The war in Ukraine is creating a great deal of uncertainty on the market. The economic consequences of these events are difficult to predict but, in the long term, we can expect several significant changes in the market of warehousing space,” says Tomasz Lubowiecki, founder and President of the Management Board of 7R.
According to Colliers, the total supply of modern warehousing space in Poland at the end of Q1 2022 was over 25 million sqm. Property developers put almost 1.3 million sqm into service at that time, which was the highest ever result in the history of the Polish market of industrial and logistical space. The past quarter also saw a record volume of space under construction. At the end of March 2022, it was 4.8 million sqm.
Many factors will determine whether the rate of growth of the market in 2022 will be similar to that of last year. Of these, undoubtedly the most important is still the potential escalation of the war in Ukraine and its economic consequences.
“Significant increases in construction costs were already noticeable since the start of the pandemic, although the war in Ukraine accelerated this process. Therefore, in the longer term, we can expect increases in base and effective rents, which are dictated, among other things, by higher raw material prices, as well as rising service charges and energy prices,” explains Maciej Chmielewski, Senior Partner, Director of Industrial and Logistics Agency at Colliers.
Logicor developing new site for Royal Canin
Logicor announced that it has started developing a strategic logistics site for pet food manufacturer, Royal Canin. The new site will help the company to grow its operations in Europe.
The new project is a modern built-to-suit Class A warehouse near Kraków, which will be adjacent to Royal Canin’s existing facility in Poland. It is a strategic development for the Royal Canin factory, which now serves 24 European and Asian markets.
The 26,500 sqm facility will feature sustainable solutions and is planned to be at least BREEAM Very Good certified (or equivalent), in line with Logicor’s ESG policy.
Agnieszka Sadowska, CNE Supply Chain Director at Royal Canin Polska, said: “With this development, we are securing space for the future growth of our operations, space for new capabilities, better agility and lower CO2 emissions.”
Michał Ptaszyński, Country Manager Poland at Logicor, said: “Our customers are increasingly demanding comprehensive projects combining land purchasing, construction, and facility management, and we are eager to support them with our logistics experience in Poland.”
GH Development will build over 1,500 apartments in Warsaw
GH Development, a Belgian developer present on the Polish market since 2018, has crystallised its ambitious business plans. The company owns various attractive plots of land in Warsaw, on which it plans to carry out housing investments. Ultimately, the developer plans to build over 1,500 apartments in Warsaw.
Currently, GH Development is completing its first project in Poland – the MOXO HOUSE apartment building located in Warsaw’s Mokotów district where 80 percent of the project has already found its owners.
“After an intensive preparatory period and our debut on the Warsaw real estate market, we are starting work on new projects, finalizing the formalities and preliminary work for further investments that are planned still this year,” said Aleksandra Żuralska, Country Manager GH Development.
Immofinanz with a strong start to the 2022 financial year
IMMOFINANZ completed a solid start to the 2022 financial year: Like-for-like rental income rose by 4.3% in the first quarter, the occupancy rate remained high at 94.4%, and Net profit totalled EUR 72.4 million. With an equity ratio of 52.3% and a conservative debt level with a net LTV of 32.7%, IMMOFINANZ has a strong capital foundation.
“The strong growth in like-for-like rental income underscores the optimal positioning of our portfolio: This mix of affordable retail for consumers and high-quality, innovative and flexible offices solutions meets the requirements of our tenants as well as their customers and employees“, explained Dietmar Reindl, member of the Executive Board of IMMOFINANZ. “Positive development was recorded in most of the markets – led by Austria. Like-for-like rental income rose by 2.9% in the office business and by 5.6% in the retail business, which impressively demonstrates the strength of our STOP SHOP and myhive brands.”