BTS projects, or built-to-suit facilities, include industrial and warehouse spaces designed according to the specific requirements of tenants. Despite their industrial nature, these projects often incorporate ecological solutions, modern low-emission technologies, and innovative technical features tailored to the operational needs of the tenant. We spoke with Dariusz Proniewicz, BTS Development Director at MDC², one of Poland’s leading developers of warehouse and industrial properties, about the characteristics of this segment, what drives its rapid growth, and why it’s becoming a market trend.
What exactly is built-to-suit in the context of industrial space?
Built-to-suit is a business model used in industrial developments where 100 percent of the project is designed according to the tenant’s requirements. In our BTS department, we offer two main business models: the first, a “typical” BTS project, where the developer or final investor retains ownership of the property, and the tenant pays a monthly rent; the second is built-to-own (BTO), where the client finances or becomes the owner of the property after its delivery.
BTS projects address the needs of companies whose production activities require that many aspects of an industrial facility be adapted to their specific business processes. These requirements include adjusting the development for technology, organizing internal and external functions, adapting to production automation or logistics, selecting appropriate ventilation, temperature, and humidity controls, or securing hazardous and explosive materials. Our clients also demand fit-outs of facilities for employees, securing technical equipment, access to public transport, and, of course, proximity to a local labour market.
A newly designed project that includes all tenant requirements minimizes costs compared to adapting existing facilities, which can often be ineffective or even impossible. The process of constructing a BTS building differs from building a speculative warehouse—it’s more demanding and requires close collaboration between the developer and the tenant during the planning and construction stages to ensure that the final facility meets the company’s needs and provides maximum flexibility and productivity.
How is built-to-suit related to the nearshoring trend?
The nearshoring trend is closely connected to offshoring and friendshoring. Each of these trends is developing rapidly and will likely dominate the Polish market in the coming years.
A significant group of clients interested in BTS projects are companies with strong capital that are increasingly relocating production and logistics operations to countries like Poland. For such companies, in addition to a favourable geographic location close to their sales markets, relatively low costs, and access to a well-trained workforce, it is essential to establish operations in facilities that meet the demands of modern production processes. BTS provides the opportunity to integrate lower investment costs with the latest technologies, automation, and energy-saving solutions, which directly contribute to greater productivity. The company not only optimizes operations by shortening supply chains or improving efficiency but also minimizes environmental impact.
At MDC², we have seen growing interest in BTS projects, and we predict that the number of such investments in Poland will increase significantly in the next 2-3 years.
What are the biggest technical and design challenges when creating BTS facilities?
From a developer’s perspective, the only technical limitation is the available budget. Today, it is possible to implement almost any modern solution, but advanced technologies can be significantly more expensive. Therefore, each function or technology must be economically justified.
In terms of design, local spatial development plans present a major challenge, as they may impose limits on building height, environmental impact, or certain production processes, and may even ban the installation of photovoltaic panels or other ecological solutions like heat pumps. Not all production or storage functions can be implemented in every location, and finding a suitable site that meets all the client’s requirements can be time-consuming and challenging.
Another challenge is the availability of infrastructure, particularly electricity. High energy demands in production facilities often exceed available resources, requiring additional investments in energy infrastructure, which can delay project implementation.
Are there specific industries that particularly benefit from BTS and nearshoring?
Several dominant industries benefit from BTS and nearshoring, including automotive, pharmaceutical, FMCG, and food. However, we approach each project with great interest and motivation.
BTS is especially suited to companies following a nearshoring strategy, particularly in the manufacturing sector, which aims to increase production efficiency and reduce risks associated with management, transport, and logistics. Companies planning to implement new advanced technologies also find BTS attractive, as their existing facilities often don’t meet their needs.
The pandemic highlighted the importance of supply chain security, prompting automotive companies to focus on locating production closer to key markets to ensure uninterrupted operations. The BTS model allows them to establish facilities that meet specific production requirements, such as high energy demand, specialist laboratories, R&D areas, paint shops, or material processing installations.
Are there other specific requirements for tenants leasing BTS buildings within the nearshoring trend?
Tenants’ requirements are diverse and tailored to their specific business and industry needs. Internal modifications may include additional ventilation systems, temperature and humidity control, compressed air installations, reinforced electrical installations, and internal and external storage for materials used in production. Many tenants also want the appearance of the building to align with their brand’s visual identity, fostering local recognition and a sense of ownership.
In terms of technical specifications, tenants may request taller buildings (up to 40 meters), reinforced flooring, halls equipped with cranes, water purification systems, or fire protection systems. Close cooperation between the developer and the tenant is critical to delivering a tailor-made facility.
Energy-saving technologies and ESG policy compliance are also increasingly important to tenants. Developers who offer environmentally friendly solutions, certified at least at the **BREEAM Excellent** level, are preferred. Meeting strict project deadlines is also crucial for tenants to maintain continuous production.
What benefits do BTS buildings offer compared to standard warehouses?
Tailor-made buildings offer operational flexibility, allowing tenants to adapt functions to changing business and market conditions. This helps optimize operating costs, shorten delivery times, and enhance order fulfilment, ultimately improving competitiveness.
Modern BTS buildings that meet ESG requirements also provide savings through lower energy and utility costs and the possibility of obtaining grants, tax incentives, or financial support.
For both tenants and investors, BTS solutions are advantageous. Long-term leases of modern buildings reduce the need for capital investment, improve financing conditions, and provide greater security for the business.
What other trends related to nearshoring are being observed in the industrial property market?
Friendshoring is a prominent trend, where companies relocate production to countries with which they have positive economic relations and shared cultural and political values. Unlike traditional outsourcing focuses solely on cost, friendshoring emphasizes stability and mutual trust. This trend has been accelerated by the war in Ukraine, as companies seek to minimize supply chain risks, and growing awareness of business ethics, employee rights, and environmental protection.
Reshoring, where production is relocated back to home countries, is another trend that gained momentum during the pandemic. These strategies can be applied simultaneously, as seen in Poland’s growing electromobility sector, where the country is becoming a key hub in Europe.
What are the prospects for BTS projects?
The future looks promising. We are seeing growing interest in the BTS model from both tenants and investors, indicating stable growth. Poland, with its skilled workforce and attractive investment conditions, is becoming a major centre for BTS projects, especially in the context of nearshoring.
These are projects that require several years of preparation and are increasingly integrated into company strategies. I believe this trend will continue to develop dynamically, driven by market and technological needs. The market is currently preparing for intensive growth due to deglobalization and nearshoring strategies. These trends favour locating production and logistics operations in nearby regions, increasing demand for modern, tailor-made buildings. Poland, with its low investment costs, skilled labour, and investor-friendly processes, is becoming an attractive market for warehouse and production facilities.
