Interview with Robert Dobrzycki, managing partner of Panattoni Europe
by Beata Socha
Amazon is currently building three logistics centers in Poland. Do you think Poland will see more such investments in the future? Is Poland an attractive destination for warehouse and logistics outsourcing?
Poland’s central location, as well as its political and economic stability, are making the country increasingly attractive to Western European investors. The country managed to stave off the economic crisis and is currently gaining on importance as a warehouse and logistics destination. Poland’s warehouse and industrial investment volume is only second to Germany, the biggest economy in Europe.
The Polish logistics market offers investors a base which supports the development of other markets. This translates into a higher investment volume in the market, also fueled by the country’s attractiveness as an outsourcing destination. Major international companies are increasingly looking for cost-efficiency in Central Europe as a near-shoring alternative to Asian countries.
The majority of recent projects are all located along Poland’s western border. What is it that draws so many companies there?
Poland has invested a lot in expanding its infrastructure alongside the western border, including building the S3 expressway which connects the port in Szczecin with Central Europe, particularly with the Czech Republic. Investors are increasingly interested in the western part of the country. Market reports indicate the volume of goods arriving in Polish ports is growing and thus these ports are expanding.
As a warehouse developer, we can see increasing interest from companies in locations alongside the S3 expressway. We have completed a dedicated production hall for RECARO Aircraft Seating in Ĺšwiebodzin, a 30,500-sqm facility for Lear Corporation in the Legnica Special Economic Zone, as well as two units for Faurecia, one in the Legnica SEZ and one in Gorzów Wielkopolski, within the Kostrzyn-Słubice SEZ. Within the Wałbrzych SEZ Invest-Park, there is also the 33,000-sqm BTS we built for Polaris – an American producer of quads in Opole.
What about eastern Poland? Is there any demand for warehouse space there?
In eastern Poland, demand is for industrial assets (production facilities). These are only BTS units, often dedicated to local companies in need of refurbishing or expanding their current space. For example, Zelmer decided to optimize its production processes and replace its production facilities located in several buildings with a single modern production and warehouse complex situated in Rzeszów.
Panattoni also recently built Pilkington’s second factory. The first one is located in Sandomierz. The city’s master plan would not allow for another one there, so we built it in neighboring Tarnobrzeg.
All this development shows the potential of the region, mostly because of the presence of highly-qualified labor. The growth of the logistics and warehouse segment in eastern Poland is stymied, however, by insufficiently developed infrastructure (highways, roads and airports) and the significant distance from Western Europe.
We’ve seen some speculative space being constructed over the past few months, but the bulk of new space comes in built-to-suit schemes. What asset classes are currently in demand?
The growing e-commerce sector is driving demand for assets dedicated to this market segment, across all asset classes.
In Amazon’s case, these are usually XXL facilities like the three units currently under construction in PoznaĹ„ and Wrocław, each comprising 100,000 sqm. However, international and local transport companies, carriers and major logistics concerns create demand for small and big units alike.
Companies like DSV Road, for which Panattoni constructed several facilities, and DHL have very specific requirements for their space usually featuring cross-docking platforms. Meanwhile, logistics operators usually lease space to service a particular contract with a client.
Apart from units dedicated to e-commerce, there are a number of BTS being built for production purposes, for companies moving manufacturing to Poland from Western Europe.
We have also expanded our offer with value-added acquisitions where Panattoni Europe purchases industrial properties, refurbishes or expands them raising their value, and then re-commercializes them or sells them to investment funds. For instance, we’ve redeveloped a facility for Lear Corporation in Legnica. We’ve also acquired K-Flex’s production plant comprising 8,000 sqm with plans to add another 8,000 sqm of warehouse space as well as refurbish the building’s facade and the routes leading to the building.
You are now responsible for the company’s operations not only in CEE, but in western markets as well. Where do you see opportunities for growth? What is Poland’s role in Panattoni’s global strategy?
Up until now, our Western European division has performed well and the Eastern Europe division performed above average. The new goal for us is to push all operations of the company to perform above average.
The role of Poland’s warehouse market is currently increasing as even the most demanding investors are starting to see the country as their second choice, following Europe’s key market, Germany. They’re starting to see that Poland has overcome the crisis and that it’s become a transparent market that offers a useful base from which to provide support to other markets, such as neighboring Germany.
What we’ve witnessed for some time now is that in an effort to improve cost efficiency investors have begun looking beyond Poland to its neighboring countries. The recent Russian-Ukraine tension has slowed this process and we have already seen a number of companies looking to move their operations further to the East to provide even higher cost-efficiency.
As the new managing partner of Panattoni Europe, how do you see the company’s further development?
We’ll be increasing our focus on Germany, as it continues to be seen as Europe’s core warehouse market. Both due to the size of the market as well as to the fact that it’s an industrialized country whose exports are global. Germany’s warehouse market provides great opportunities.
Another advantage of Germany is the location, which makes the country a gateway to Europe for global industrial players and a key distribution point. Until now, leasing space at logistics parks wasn’t that popular. Companies preferred to have ownership of the properties. This is changing. There are many key global players here from the automotive industry, but also smaller specialized companies and we want to be here as well.